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Information concerning the capital structure of Bedrock Mining, Inc. is as follows:

$\backslash$table$[[,2021,2022],[$Common stock,$90,000$ shares,$90$ shares$],[$Convertible preferred stock,$10,000$ shares,$10,000$ shares$],[8\%,$$$1,000$ par, convertible bonds,$$1,000,000,$$$1,000,000]]$

During $2022,$ Bedrock Mining paid dividends of $$1$ per share on its common stock and $$2\mathrm{.}40$ per share on its preferred stock. The preferred stock is convertible into $20,000$ shares of common stock. The $8\%$ convertible bonds are convertible into $30,000$ shares of common stock. The net income for the year ended December $31,2022$ was $$285,000$ and the company's income tax rate was $21\%.$

Required:

What was basic EPS, rounded to the nearest penny?

What was diluted EPS, rounded to the nearest penny?

SOLUTION:

$\backslash$table$[[,$Basic EPS,Diluted EPS$],[$Common shares outstanding,,$],[$Conversion of bonds,,$],[$Conversion of preferred stock,,$],[$Number of shares used in EPS computation,,$],[,,],[$Net income as reported,,$],[$After$-$tax interest on the bonds $($$$80,000\backslash$times $$0\mathrm{.}79),,],[$Preferred dividends $($$$2\mathrm{.}40\backslash$times $10,000$ shares$),,],[$Earnings used in EPS computation,,$],[,,],[$Earnings per share,,$]]$