Question 2 (23 points) (23 MARKS = 32 minutes) Shari Brown is the Controller of Gloss Inc. She is currently preparing the calculation for basic and diluted earnings per share. The following has been extracted from the financial statements for the fiscal year ended December 31, 2019. Long Term Debt 9% convertible bonds 10% bonds payable $5,000,000 6,000,000 Shareholders 'Equity 52.000.000 4.000.000 2.002000 $6 Class A preferred shares, cumulative and convertible 400,000 shares authorized, 100,000 shares issued and outstanding $3.50 Class B non-cumulative preferred shares, 1,000,000 shares authorized. 300,000 issued and outstanding Common shares, unlimited number of shares authorized and 1,000,000 shares issued and outstanding Retained earnings 122.000.000 During 2020/2021 the following transactions took place 2020 Moms Retained earnings 13.000.000 During 2020/2021 the following transactions took place: 2020 January 31 March 31 June 30 Preferred dividends totaling $2,250 000 were paid 200.000 common shares were issued for $9.00 per share One-half of the convertible bonds are converted into common shares (after the payment of semi-annual interest) The company purchases 400.000 common shares in the open market for $15 per share Net income for the year is $3.850.000 September 30 December 31 2021 The company splits its stock 2:1 February 15, 2021 Additional information: The company has the following stock options outstanding oury 1, 2020 Grant A - 250 000 options with an exercise price of $10 veste me 30, 2022 Det February 15, 2021 The company splits its stock 2:1 Additional information: . The company has the following stock options outstanding January 1, 2020: Grant A - 250,000 options with an exercise price of $10 vesting June 30. 2022 Grant B-3 100.000 options with an exercise price of $15 vesting September 30, 2023 Prior to the January 31, 2020, the last dividend was paid January 31, 2018. The Series A preferred shares are convertible into 10 common shares for each preferred share The convertible bonds were issued at face value and pay interest serve annually. The bonds are convertible into 50 common shares per $1.000 tace value bond During 2020 no options were exercised: average common share price was $12 . The company's corporate tax rate is 40% The company's year-end is December 31, with financial statements issued on March 31 of the following year. REQUIRED (Note: All Answers should be calculated to 3 decimales for example $12.336 per share) Calculate basic earnings per share for the year ended December 31, 2010 1. lgnore the results of part (1) Assume basic camnesger ure 5100 (income ansilable a common holders $20000000 TRIC LUMParty 3 y Cai CHU is CLCITUCI UI, WAT inancial Staic CLS UCU March 31 of the following year. REQUIRED (Note: All Answers should be calculated to 3 decimal places, for example $12.336 per share) i. Calculate basic earnings per share for the year ended December 31,2020 ii . Ignore the results of part (i). Assume basic earnings per share is $1.000 (income available to common shareholders $2,000,000 and weighted average shares outstanding 2.000.000). Calculate diluted earnings per share. B TV - Paragraph