Part I. Information concerning the capital structure of Dole Corporation is reproduced below:

During Year 6, Dole pays dividends of $1 per share on its common stock and $2.40 per share on its preferred stock. The preferred stock is convertible into 20,000 shares of common stock. The
8% convertible bonds are convertible into 30,000 shares of common stock. Net income for the year ended December 31, Year 6, is $285,000. The income tax rate is 50%.

Required:
a. Compute basic earnings per share for the year ended December 31, Year 6.
b. Compute diluted earnings per share for the year ended December 31, Year6.

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DECEMBER 31 Year 5 Year 6 Common stock. Convertible preferred stock. . . 8% convertible bonds. . . 90,000 shares 90,000 shares 10,000 shares $1,000,000 10,000 shares $1,000,000