On December 31, 2021, Grammy Company had outstanding 500,000 shares of common stock and 40,000 shares of 7% cumulative preferred stock (par $10).

On March 31, 2022, Grammy issued an additional 80,000 shares on common stock. A 10% stock dividend was declared and distributed on July 1, 2022. On October 1, 2022, Grammy purchased 24,000 shares as treasury stock.

No dividends were declared in 2022. Net income was $800,000. The tax rate for the year was 25%.

At year-end, there were fully vested incentive stock options outstanding for 40,000 shares of common stock (adjusted for the stock dividend). The exercise price was $12. The market price of the common stock was $15 per share on December 31, 2022, and averaged $20 per share during the year. Also outstanding were $1,000,000 face amount of 4% convertible bonds issued in 2019 and convertible into 50,000 common shares (adjusted for the stock dividend). Required: (do not enter dollar sign; do not add a comma when entering an amount)

1. To calculate basic earnings per share for the year ended December 31, 2022,

a. The amount included in the numerator will be_______________

b. The amount included in the denominator will be_______________

2. To calculate diluted earnings per share for the year ended December 31, 2022,

a. The amount included in the numerator will be_______________

b. The amount included in the denominator will be_______________