1.Income from continuing operations would not include

1. Bad debt expense
2. Loss from the sale of equipment
3. Extraordinary gain/loss
4. Cumulative effect of change in accounting principal

2.Primary EPS is changed to fully diluted EPS for outstanding convertible bonds by

1. Adding to the denominator the shares the bonds can be converted into
2. Adding to the numerator the interest expense on the bonds, net of tax savings from the bonds interest expense
3. Convertible bonds are not considered when computing fully diluted EPS
4. Both a and b are used in the computation of fully diluted EPS

I highlighted what I think the answer is- What are your thoughts