• The beginning balance of outstanding common shares is equal to 300,000 shares
• The company has 20,000 shares of $100 par value 3% noncumulative, convertible preferred shares. Each preferred share converts into 1 share of common stock.
• The company has $4,000,000, $1,000 par value, 6% convertible bonds outstanding. The bonds were issued at par. Therefore, the effective interest rate is also 6%. Each bond converts into 20 shares of common stock.

Other information:

• Net income after tax is equal to $800,000.
• The effective tax rate is 30%.
• No dividends were declared by the Board of Directors.

REQUIRED:

Compute Basic and Diluted Earnings per Share. Antidilution sequencing is not required.