1. Assume that the following data relative to Eddy Company for 2014 is available:
Net Income $1,400,000
Transactions in Common Shares Change Cumulative
Jan. 1, 2014, Beginning number 500,000
Mar. 1, 2014, Purchase of treasury shares (60,000) 440,000
June 1, 2014, Stock split 2-1 440,000 880,000
Nov. 1, 2014, Issuance of shares 120,000 1,000,000
8% Cumulative Convertible Preferred Stock
Sold at par, convertible into 200,000 shares of common;
Outstanding for all of 2014. $1,000,000
Stock Options
Exercisable at the option price of $25 per share. Average
market price in 2014, $30. Outstanding for all of 2014. 60,000 shares
REQUIRED:
Compute both basic and diluted earnings per share.