Part Two: Problem Solving (Please keep two decimals for all calculation) 1. (10 points) On December 31, 2017, Heffner Company had 100,000 shares of common sto outstanding and 30,000 shares of 7%, $100 par, cumulative preferred stock outstanding. On February 28, 2018, Heffner purchased 24,000 shares of common stock on the open market a treasury stock paying $45 per share. Heffner sold 6,000 of the treasury shares on September 2018, for $47 per share. Net income for 2018 was $540,000. The income tax rate is 40%. Al outstanding at December 31, 2018, were fully vested incentive stock options giving key personnel the option to buy 50,000 common shares at S40. The market price of the common shares averaged $50 during 2018. Five thousand 6% bonds were issued at par on January 1, 2018. Each $1,000 bond is convertible into 125 shares of common stock. None of the bonds been converted by December 31, 2018, and no stock options were exercised during the year. 0 2 a. Please compute basic earnings per share for 2018, show necessary computation. b. Please compute diluted earnings per share for 2018, show necessary computation