On January 1, 2014, Crocker Company issued 10-year, $3,659,000face value,6% bonds, at par. Each $1,000 bond is convertible into23shares of Crocker common stock. Crockers net income in 2014 was $280,000, and its tax rate was45%. The company had102,000shares of common stock outstanding throughout 2014. None of the bonds were converted in 2014.

(a) Compute diluted earnings per share for 2014.(Round answer to 2 decimal places, e.g. $2.55.)

Diluted earnings per share$1.96

(b) Compute diluted earnings per share for 2014, assuming the same facts as above, except that $1,020,000of6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into5shares of Crocker common stock.(Round answer to 2 decimal places, e.g. $2.55.)

Diluted earnings per share$1.83