Question 2 (EPS with actual conversion): Choco Company had the following capital structure at January 1, 20X2:

Required: Compute the basic and diluted earnings per share for Choco for 20X2 (Round to 2 decimal places).

Outstanding $7,200,000 Ordinary shares, 600,000 shares 10% stated interest rate convertible bonds issued at par; each $1,000 bond is convertible into 80 ordinary shares $5,000,000 During 20X2, Choco had the following share transactions: May 1 Issued 50,000 ordinary shares for $30 per share. . Sep. 1 Redeemed 100,000 ordinary shares at $35 per share. Nov. 1 Converted $2,000,000 of bonds. Net income for 20X2 was $1,900,000. The income tax rate was 32%