Jones Corporations capital structure follows.

December 31

Outstanding shares of stock:

Common stock, outstanding shares110,000

Convertible preferred stock, Outstanding shares10,000

8% Convertible bonds..$1,000,000

During the year, the company declared and paid dividends of $3 per share on its preferred stock. The preferred shares are convertible into 20,000 shares of common stock. The 8% bonds are convertible into 30,000 shares of common stock. Net income for the year is $85,000. The income tax rate is %25.

Required

1. Compute basic EPS b. Compute diluted EPS