Problem 3: Penguin Ice Inc. was formed on June 20, 2017, through the merger of Penguin Corp. and Ice Inc. Penguin Ice Inc. issued a total of 2,500,000 shares of common stock to the owners of the merged companies. The new company had the following during 2019. transactions n April 1, 2019, the company issued an additional 500,000 shares of stock for cash. On July 1, 2019, the company is ued $1 million of 15-year, 6% convertible bonds at par. Each $1,000 bond converts to 25 shares of common stock at any interest date. None of the bonds have been converted to date. Penguin Ice Inc. is preparing its annual report for the fiscal year ending December 31, 2019, and will report after-tax net income of $13,600,000. The tax rate is 40%. a. Determine the number of shares to be used for calculating: 1. Basic earnings per share. Event Dates Shares Outstanding Fraction of Weighted Year Shares outstanding 2. Diluted earnings per share. Fraction of Weighted Year Shares Dates outstanding Event Shares Outstanding b. The earnings figures to be used for calculating: 1. Basic earnings per share 2. Diluted earnings per share