The following data relate to Schroeder Ltd. for the calendar year 2020:

Net income (30% tax rate) ...................................$3,250,000

Average number of common shares outstanding during 2020..................................1,200,000shares

8%, cumulative convertible preferred shares: convertible into 90,000 common shares ............$1,800,000

6% convertible bonds; convertible into 60,000 common shares ..............................................$2,000,000

Stock options, exercisable at $30 per share ............ 105,000 shares

All the convertible securities and stock options were outstanding all year. The average market price of the common shares in 2020 was $35.

Instructions Calculate:

a. basic earnings per share

b. diluted earnings per share.