Q1At December 31, 2019, Pinwheel Ltd. had 900,000 common shares outstanding. In addition, the corporation had 350,000 non-cumulative preferred shares outstanding, which were convertible into 600,000 common shares. During 2020, Pinwheel paid cash dividends of $ 360,000 to the common shares and $ 225,000 to the preferred shares. Net income for 2020 was $ 1,350,000 and the income tax rate was 40%. Diluted earnings per share for 2020 is

		2.25
		1.5
		0.90
		1.11

Q2Information concerning the capital structure of Shepherd Corporation follows

December 31,

2020 2019

Common shares outstanding 100,000 shares 100,000 shares

Convertible preferred shares outstanding 10,000 shares 10,000 shares

9% convertible bonds $ 2,000,000 $ 2,000,000

During 2020, Shepherd paid dividends of $ 1.00 per common share and $ 2.50 per preferred share. The preferred shares are non-cumulative, and convertible into 20,000 common shares. The 9% convertible bonds are convertible into 50,000 common shares. Net income for calendar 2020 was $ 500,000. Assume the income tax rate is 30%. Basic earnings per share for 2020 is

		4.75
		3.65
		3.33
		5.00