The following information was taken from the books and records of Ludwick, Inc.:

1. Net income $ 420,000

2. Capital structure on 1/1/X01:

a. Convertible 5% bonds. Each of the 300, $1,000 bonds discounted at 3% is convertible into 50 shares of common stock at 1/1/x01 and for the next 5 years (ending on 12/31/x05). 313,355

b. $10 par common stock, 200,000 shares issued and outstanding during the entire year. 2,000,000

c. Stock warrants outstanding to buy 16,000 shares of common stock at $20 per share.

3. Other information:

a. Bonds converted during the year None

b. Income tax rate 20%

c. Interests on bonds are paid on 12/31 each year

d. Average market price per share of common stock during the year $50

e. Warrants were outstanding the entire year

f. Warrants exercised during the year None

Instructions: Compute basic and diluted earnings per share