On December 31, 2018, Jack-N-Jill reported $250,000 of 6% bonds which remained outstanding throughout the year 2019. On that date, each $1,000 bond had 4 detachable stock warrants and each warrant allowed the warrant holders to buy one share of stock for $60. None of the warrants were exercised during the year. On June 15, the company had declared a 300% stock dividend [be sure to adjust for conversion factor and exercise price]. The average adjusted share price was $36 each during the year. The application of the treasury stock method in calculating diluted earnings per share will increase the income (numerator) and the weighted average number of outstanding shares (denominator) by

Select one:

a.

$0 and 20,000 shares.

b.

$120,000 and 3,000 shares.

c.

$3,000 and 1,875 shares.

d.

$3,000 and 3,000 shares.

e.

$0 and 1,333 shares.