Jane Co. has the following data for the year: Net income Outstanding shares, January 1 Employee share options during the year: Option shares Exercise price FV of each share option Average market price Ending market price at year end Required: Compute for the following: 1. Basic EPS Option shares Multiply by: Total exercise price (180 + 20) Proceeds from assumed exercise options Divided by: Average market price during the year Assumed treasury shares Option shares Less: Assumed treasury shares Incremental shares 2. Diluted EPS 3. Diluted EPS assuming the options were outstanding on January 1 and were exercised on October 1 when the market price of the ordinary shares was $255. Option shares Multiply by: Total exercise price (180 +20) Proceeds from assumed exercise options Divided by: Market price at date of conversion Assumed treasury shares $2,000,000 100,000 Option shares Less: Assumed treasury shares 20,000 P180 20 250 300 20,000 200 4,000,000 250 16,000 20,000 16,000 4,000 20,000 200 4,000,000 255 15,686 20,000 15,686