Shaffer Corporation issued 100, $1,000, 10% convertible bonds in 2019 at face value. Each bond is convertible into 100 shares of common stock. Shaffer's net income for 2020 is $1,824,000 ($2,432,000 before tax). Considering all factors except convertible bonds, average common shares outstanding for 2020 were 1,010,000.

• Note: In the following calculations, enter the earnings per share amounts in dollars and cents, rounded to the nearest penny.

Compute basic EPS.

Compute diluted EPS.

c. How do the answers to parts a and b change if the bonds were issued on July 1, 2020?

	Net Income Available to Common Stockholders	Weighted Avg. Common Shares Outstanding	Per Share
Basic EPS	Answer	1,010,000	1.81
Diluted EPS	1,831,500	1,020,000	1.8

d. Ignoring part c, how do the answers to parts a and b change if one-half of the bonds were converted on July 1, 2020? Hint: For this exercise, assume that the net income given needs to be adjusted to reflect six months of interest expense instead of one year of interest expense.

	Net Income Available to Common Stockholders	Weighted Avg. Common Shares Outstanding	Per Share
Basic EPS	Answer	Answer	1.81
Diluted EPS	1,831,500	1,020,000	1.8