Calculate basic and diluted earnings per share

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Question - For Year 8, Westmount Corp. had 200,000 common shares outstanding for the full year. Westmount follows IFRS. Market prices of the common shares during Year 8 were:

January 1: $45; Year's average: $50; December 31: $52.

Westmount's income tax rate is 30%.

During Year 8, there were:

1. 30,000 outstanding options to buy common shares at $40 a share;

2. 20,000, $7, no par value, cumulative and convertible preferred shares outstanding. Each preferred share is convertible into three common shares;

3. $2,000,000 of 8% convertible bonds issued at par. Each $1,000 bond is convertible into 20 common shares.

The corporation reported $750,000 net income for calendar Year 8.

Required - Calculate basic and diluted earnings per share for Year 8. Show all calculations.

Reference no: EM133101085

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