Information relating to the capital structure of Harry Porter Corporation at December 31, 2012 and 2013, is as follows:
Outstanding
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270,000 shares
Convertible preferred stock noncumulative (issued in 2011) . . . . . . . . . . . . 24,000 shares
7.5% convertible bonds (issued in 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $900,000
Stock options to purchase 32,000 shares at $12. The average market price of
Harry Porter stock during 2013 was $18.
Harry Porter Corporation paid dividends of $4 per share on its preferred stock. The preferred stock is convertible into 48,000 shares of common stock. The 7.5% convertible bonds are convertible into a total of 26,000 shares of common stock. The net income for the year ended December 31, 2013, is $760,000. Assume that the income tax rate is 30%. Compute basic and diluted EPS for the year ended December 31, 2013.