Pro Corporation owns 80 percent of Sit Corporation's outstanding common stock. The 80 percent interest was acquired in 2011 at $40,000 in excess of book value due to undervalued equipment with an eight-year remaining useful life. Outstanding securities of the two companies throughout 2012 and at December 31, 2012, are:

Sit Corporation's net income is $50,000 for 2012, and Pro's net income consists of $70,000 separate income and $23,800 income from Sit.REQUIRED1. Compute consolidated basic and diluted earnings per share, assuming that the preferred stock is convertible into 4,000 shares of Sit Corporation's common stock.2. Compute consolidated basic and diluted earnings per share, assuming that the preferred stock is convertible into 5,000 shares of Pro's common stock.

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Sit Pro Common stock, $5 par Common stock, $10 par 14% Cumulative, Convertible, Preferred Stock, 20,000 shares 6,000 shares 1,000 shares $100 Par