Part II At 1 January 2022, Sunshine Company's outstanding shares included the following: 100,000 shares of $2 par value, 8% cumulative and non-convertible preference shares 500,000 shares of $1 par value ordinary shares On 1 April 2022, the Company issued additional 50,000 ordinary shares at $15 each. Two weeks later, 2-for-1 share split was carried out. On 1 July, the Company decided to repurchase 2,000 ordinary shares as treasury shares paying $35 each. On 1 October, the Company issued 5% convertible bonds at par for $1,000,000. Each $1,000 bond is convertible into 100 ordinary shares. During the year, 2,500 share options were granted to the top executives. Each option permits the holder to purchase the ordinary share at an exercise price of $30. During 2022, the average market price of the ordinary share was $40. The net income for the year ended 31 December 2022 is $1,650,000 and the income tax rate is 20%. At the financial year end, the Company declared and paid $0.5 dividends for each ordinary share. There were no dividends in arrears prior to 2022. Required: (Show all the workings and answers should be rounded to 4 decimal places.) (a) Compute the basic earnings per share for the year 2022. (b) Compute the diluted earnings per share for the year 2022. (6 marks) (5 marks) (c) Assume all the preference shares are convertible and every two preference shares can be convertible to one ordinary share, will it affect your answer in part (b) above? Support your answers with workings. (2 marks) - End of Section A