CHAPTER 19 Share-Based Compensation and Earnings Per Share 1139 Concept Review Exercise ADDITIONAL EPS ISSUES At December 31, 2021, the financial statements of Bahnson General, Inc. included the following: Net Income for 2021 (Including a net-of-tax loss from $180 million discontinued operations of $10 million) Common stock. $1 par: Shares outstanding on January 1 44 million The share price was $25 and 528 at the beginning and end of the year, respectively. Additional data: At January 1, 2021, $200 million of 8% convertible notes were outstanding. The notes were converted on April 1 into 16 million shares of common stock. An agreement with company executives calls for the issuance of up to 12 million additional shares of common stock in 2022 and 2023 based on Bahnson's net income in those years. Executives will receive 2 million shares at the end of each of those two vears if the company's stock price is at least $26 and another 4 million shares each year if the stock price is at least $29.50. The tax rate is 25%. Required: Compute basic and diluted earnings per share for the year ended December 31, 2021. CHAPTER 19 Share-Based Compensation and Earnings Per Share 1139 Concept Review Exercise ADDITIONAL EPS ISSUES At December 31, 2021, the financial statements of Bahnson General, Inc. included the following: Net Income for 2021 (Including a net-of-tax loss from $180 million discontinued operations of $10 million) Common stock. $1 par: Shares outstanding on January 1 44 million The share price was $25 and 528 at the beginning and end of the year, respectively. Additional data: At January 1, 2021, $200 million of 8% convertible notes were outstanding. The notes were converted on April 1 into 16 million shares of common stock. An agreement with company executives calls for the issuance of up to 12 million additional shares of common stock in 2022 and 2023 based on Bahnson's net income in those years. Executives will receive 2 million shares at the end of each of those two vears if the company's stock price is at least $26 and another 4 million shares each year if the stock price is at least $29.50. The tax rate is 25%. Required: Compute basic and diluted earnings per share for the year ended December 31, 2021