The following is a partial income statement for City Line Enterprises for the current year.

Partial Income Statement

Loss from Continuing Operations

Income from Discontinued Operations, net of tax

Net Income

For the Current Year

The company is subject to a $40\%$ tax rate. Share information for the current year

follows.

Event and Date

Number of Shares

$1/1$ Beginning balance

$2,000,000$

$\frac{5}{1}$ New share issue

$360,000$

$\frac{8}{1}$ New share issue

$120,000$

$12/1$ Two$-$for$-$one split

$2,480,000$

City Line provided the following information about its capital structure. The company

had employee options to acquire $500,000$ shares at an exercise price of $$7$ per share.

The average market price of the company's shares for the current year is $$10$ per share.

The company issued $3\%,$$$1,500,000$ convertible debt $2$ years ago at par value. Each

$$1,000$ par value bond converts to five shares of the company's common stock. City

Line has $$800,000$ par value, $6\%$ cumulative preferred shares outstanding for the entire

year. The preferred shares are nonconvertible. There were no actual exercises or

conversions during the year.

a$.$ Compute the weighted$-$average number of common shares outstanding for basic

earnings per share.

b$.$ Determine whether any securities are antidilutive and compute basic and diluted

earnings per share. Show all computations.

c$.$ Prepare all required disclosures beginning with income from continuing

operations.