The Canyon Company is preparing its annual earnings per share amounts to be disclosed on its 2019 income statement. It has collected the following information at the end of 2019:

• Net income: $125,000. Corporate income tax rate: 30%
• Common stock outstanding on January 1, 2019: 12,000 shares, $10 par
• Common stock issuances during 2019:
  • April 2 - 2,500 shares;
  • October 1 - 4,000 shares.
• Stock split: On November 1, the company declared a two-for-one stock split.
• Common stock prices: The common stock sold at an average market price of $20 per share during the year.
• 8% convertible preferred stock outstanding on December 31, 2019: 3,000 shares. The preferred stock was issued in 2010. Each share of $100 par preferred stock is convertible into 5 shares of common stock. Current dividends have been paid. To date, no preferred stock has been converted.
• Compensatory share options outstanding: Key executives may currently acquire 1,000 shares of common stock at $15 per share. The option were granted in 2010. To date, none have been exercised.
• $200,000 of 8% convertible bonds: Each bond is convertible into 28 shares of common stock.

Required:

Prepare supporting calculation for Canyon Company and compute its:

1. Basic earnings per share.
2. Diluted earnings per share.