Calculate basic and diluted please I need an explanation on where numbers come from, thank you

Using the above facts, calculate Basic and Diluted earnings per share

epsextra5midyearissue

Net income

$10,000

Tax rate

30%

December year end

Shares of common stock outstanding at the beginning of the year

1000

Also outstanding at the beginning of the year:

$6,000 convertible bonds issued at 95 in the prior year

The bonds have a 5 year maturity and each $1,000 bond is convertible into 10 shares of common

The company uses the straight line method for amortizing bond discount

Other securities and security activity

On February 1, the company purchased 100 shares of stock for the treasury.

On February 1, the company issued cumulative convertible preferred stock; 4%, $100 par, 100 shares each convertible to 5 shares of common stock.

On March 1, 70 of the treasury shares were reissued.

On Aprill 1, the company issued 2,000 stock options as signing bonuses to new employees. The options

vest immediately and are exercisable at any time. The exercise price of the options is $5 per share. The average

market price of the company's common stock was $4 during the year.

On June 1, the company issued 500 shares of 8% cumulative preferred stock. The par value of the stock is $50 pre share.

On August 1, the company declared a 2 for 1 stock split.

On October 1, the company issued 200 shares of common stock.

On November 1, convertible bonds were converted to common stock. These bonds had a face amount of

$6,000 and were issued at 95 in a prior year. The bonds paid interest at 10% and had a 5 year maturity. Each $1,000 bond

convertible into 10 shares of common stock.