The following data is presented by Folsom Corp. for calendar 2020:

At January 1, 2020, Folsom Corp. Corporation had 300,000 common shares outstanding. On March 1, the corporation issued 45,000 new shares to raise additional capital. On July1, the corporation declared and issued a 2 for 1 stock split. On October 1, the corporation purchased on the open market 90,000 of its own shares at $ 20.00 each and retired them.

Net income$ 3,000,000

8%, cumulative preferred shares, each $100 share is convertible into 6.67 common shares$ 1,500,0006% convertible bonds; each $1,000 bond is convertible into 12 common shares$ 8,000,000600,000 call options exercisable at $ 15 per share

Additional information

1.The preferred shares and the convertible bonds were outstanding from the beginning of the year.

2.No dividends were declared on any class of shares in 2020.

3.The average market price of the common shares in 2020 was $ 18. The stock price was $ 14 on January 1, 2020, and $ 21 on December 31, 2020.

4.The convertible bonds were sold at par.

5.The income tax rate for 2020 is 21%.

Instructions

(a) Calculate the weighted average number of common shares outstanding to be used in calculating earnings per share for 2020.

(b) Determine basic EPS - show all calculations.

(c) Determine fully diluted EPS - show all calculations.