Isabelle Leclerc is the controller at Pharoah Pharmaceutical Industries, a public company. She is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for Pharoah's external financial statements. The following is selected financial information for the fiscal year ended June 30, 2020: , : PHAROAH PHARMACEUTICAL INDUSTRIES Selected Statement of Financial Position Information June 30, 2020 Long-term debt Notes payable, 10% $1,000,000 7% convertible bonds payable 4.000.000 10% bonds payable 4,000,000 Total long-term debt $11,000,000 Shareholders' equity Preferred shares $4.00 cumulative, 100,000 shares authorized, 29,000 shares issued and outstanding $1,450,000 Common shares, unlimited number of shares authorized, 1,100,000 shares issued and outstanding 4,500,000 Contributed surplus-conversion rights 500.000 Retained earnings 5,000,000 Total shareholders' equity $11,450,000 The following transactions have also occurred at Pharoah 1 2. Options were granted by the company in 2018 to purchase 190,000 shares at $15 per share. Although no options were exercised during 2020, the average price per common share during fiscal year 2020 was $20. $ Each bond was issued at face value. The 7% convertible debenture will convertinto common shares at 50 shares per $1,000 bond. It is exercisable after five years and was issued in 2019. Ignore any requirement to record the bonds' debt and equity components separately, The $4.00 preferred shares were issued in 2018. There are no preferred dividends in arrears, and preferred dividends were not declared in fiscal year 2020. . The 1.1 million common shares were outstanding for the entire 2020 fiscal year. Net income for fiscal year 2020 was $1.4 million, and the average income tax rate was 30%. 3. 4 4. 5. 6. * Your answer is incorrect Calculate the income effect of the dividends on preferred shares Dividends on preferred shares 118750 e Textbook and Media X Your answer is incorrect Calculate basic earnings per share for 2020. (Round answer to 2 decimal places, eg 15.25.) Basic EPS $ 1.23 e Textbook and Media X Your answer is incorrect Calculate the proceeds from assumed exercise of 190,000 options. Proceeds from exercise of options 8550000 Calculate the incremental shares oustanding upon the exercise of options. The incremental shares oustanding upon the exercise of options 142300 Textbook and Media