The following information pertains to Archibald Acquisitions Ltd. (AAL) for the year ended 31 December 20X7:
a. AAL had 150,000 common shares outstanding at the end of 20X7. Of that number, 30,000 had been issued on 31 May 20X7. No dividends were issued to common shares during the year.
b. The company had 40,000 $15 cumulative nonparticipating preferred shares outstanding throughout 20X7. Dividends of $7 were declared and paid during the year. The preferred shares are convertible into two common shares for each preferred share at any time.
c. AAL had $1,500,000 in 5% convertible debentures outstanding throughout the period. The debentures are convertible into 30 common shares per $1,500 principal amount.
The company paid $75,000 in interest and recorded interest expense of $112,000 during 20X7.
d. In December 20X7, the company recorded a loss of $800,000 (after income tax) on a discontinued operation.
e. AAL is subject to an income tax rate of 30%.

Required:
1. Determine 20X7 basic EPS and diluted EPS, both before and after discontinued operations, assuming after-tax earnings from continuing operations of $1,800,000.
2. Repeat the calculations of basic and diluted EPS, but assume instead that after-tax earnings from continuing operations were $700,000.