On June 1, 2018, Gustav Corp. and Gabby Limited merged to form Crane Inc. A total of 720,000 shares were issued to complete the merger. The new corporation uses the calendar year as its fiscal year. On April 1, 2020, the company issued an additional 360,000 shares for cash. All 1.08 million shares were outstanding on December 31, 2020. Crane Inc. also issued $540,000 of 20year, 9% convertible bonds at par on July 1, 2020. Each $1,000 bond converts to 38 common shares at the annual interest date. None of the bonds have been converted to date. If the bonds had been issued without the conversion feature, the annual interest rate would have been 11%. Crane Inc. is preparing its financial statements for the fiscal year ended December 31, 2020. The financial statements will show earnings per share figures based on a reported aftertax net income of $1,530,000. (The tax rate is 30%).

a) Determine for 2020 the number of shares to be used in calculating: 1. Basic earnings per share, 2. Diluted earnings per share. (Round answers to 0 decimal places, e.g. 5,275.)

b) Determine for 2020 the earnings figures to be used in calculating: 1. Basic earnings per share, 2. Diluted earnings per share. (Use a financial calculator or Excel functions in arriving at the calculations for the bonds.) (Round factor values to 5 decimal places, e.g. 1.25124 and all other answers to 0 decimal places, e.g. 5,275.)