P$15\mathrm{.}8$B $($LO $5)($Computation of Basic and Diluted EPS$)$ The information below pertains to

Payson Company for $2026.$

There were no changes during $2026$ in the number of common shares, preferred shares, or convertible

bonds outstanding. There is no treasury stock. The company also has common stock options $($granted in

a prior year$)$ to purchase $120,000$ shares of common stock at $$12$ per share.

Instructions

a$.$ Compute basic earnings per share for $2026.$

b$.$ Compute diluted earnings per share for $2026.$