Intermediate accounting 2 - Liabilities and Equities

QUESTION 5.2 (30 marks) Schwabisch Hall Corp. provides the following data for calendar 2020 Net Income $ 2,400,000 Transactions in Common Shares Change Cumulative Jan 1: Beginning 1,000,000 Mar 1: Purchase of treasury shares (60,000) 940,000 Jun 1: Shares split 2 for 1 940,000 1,880,000 Nov 1: Issuance of new shares 120,000 2,000,000 8% Cumulative Convertible Preferred Shares (no par) Convertible into 200,000 common shares adjusted for split on June 1 = $ 1,000,000 Stock Options Exercisable at the option price of $25 per share. Ave. market price in 2020 was $30 (market price and option price adjusted for split) = 60,000 shares Required a. Calculate basic earnings per share for 2020. b. Calculate diluted earnings per share for 2020