Computing Basic and Diluted Earnings per Share

Nichols Corporation began the year 2015 with 45,000 shares of common stock and 5,000 shares of convertible preferred stock outstanding. On May 1, an additional 9,000 shares of common stock were issued. On July 1, the 6,000 shares of common stock were acquired for the treasury. On September 1, the 6,000 treasury shares of common stock were reissued. The preferred stock has a $4 per share dividend rate, and each share may be converted into 2 shares of common stock. Nichols Corporation's 2015 net income is $300,000.

Required a. Compute earnings per share for 2015. Round your answer to two decimal places. $Answer b. Compute diluted earnings per share for 2015. Round your answer to two decimal places. $Answer