Information from the financial statements of Ames Fabricators, Inc., included the following:

Ames?s net income for the year ended December 31, 2021, is $500,000. The income tax rate is 25%. Ames paid dividends of $5 per share on its preferred stock during 2021.

Required:Compute basic and diluted earnings per share for the year ended December 31, 2021.

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December 31 2021 2020 Common shares Convertible preferred shares (convertible into 32,000 shares of common) 8% convertible bonds (convertible into 30000 shares of common) 100,000 100,000 12,000 12,000 $1,000,000 $1,000,000