On January 1, 2021, Raiders Company had 100,000 shares of common stock outstanding and 20,000 shares of 7%, $100 par, cumulative preferred stock outstanding. The preferred stocks are convertible to 100,000 shares of common stocks. Raiders reported net income of $500,000. The income tax rate is 40%. Also outstanding at January 1, 2021 were fully vested incentive stock options giving key employees the option to buy 40,000 common shares at $15. The market price of the common shares averaged $25 during 2021. Raiders also had 4,000, 9% convertible bonds outstanding throughout 2021. Each $1,000 bond is convertible into 100 shares of common stock. None of the bonds had been converted by December 31, 2021 and no stock options were exercised during the year.

Required:

Compute basic and diluted earnings per share for Raiders Company for 2021.