Rita Inc. reported the following breakdown of its shareholder's equity as of December 31, 2020 (the end of its current fiscal year):

$1 cumulative preferred shares, no-par, convertible at the rate of 4 for 1; 350,000 shares outstanding

$ 9,150,000

Common shares, no-par; 3,500,000 shares outstanding

15,000,000

Common stock conversion rights

231,000

Retained earnings

30,600,000

Additional information:

On 1 July 2020, 150,000 preferred shares were converted to common shares at the rate of 4- for-1.

During 2020, Rita had convertible subordinated debentures outstanding with a face value of $4,000,000. The debentures are due in 2026, at which time they may be converted to common shares or repaid at the option of the holder. The conversion rate is 12 common shares for each $100 debenture. Interest expense of $175,000 was recorded in 2020.

The convertible preferred shares had been issued in 2014. Quarterly dividends, on 31 March, 30 June, 30 September, and 31 December, have been regularly declared.

The company's 2020 net earnings were $2,289,000, after tax at 30%. Common shares traded for an average price of $18, stable in each quarter of the year.

Rita had certain employee stock options outstanding all year. The options were to purchase 600,000 common shares at a price of $14 per share. The options become exercisable in 2027.

Rita had another 100,000 employee stock options outstanding on 1 January 2020, at an exercise price of $22. They expired on 30 June 2020.

Required:

Compute Rita's basic and diluted EPS for the year ended December 31, 2020.