Problem 16-4 (EPS with Complex Capital Structure) Amy Dyken, controller at FP Industries, a public company, is currently preparing the calculation for basic and diluted earnings per share and the related disclosure for FP's financial statements. Selected financial information for the fiscal year ended June 30, 2019, is shown below: FP Industries Selected Statement of Financial Position Information June 30, 2019 Equity Share capital preference, 6% cumulative, $50 par, 100,000 shares authorised, 25,000 shares issued and outstanding Share capital - ordinary, $1 par value, 10,000,000 shares authorised, 1,000,000 shares issued and outstanding Share premium - ordinary (includes any amounts for options and conversions) Retained earnings Total equity $1,250,000 1,000,000 4,000,000 6,000,000 $12,250,000 Long-term debt Notes payable, 10% Convertible bonds payable 10% bonds payable Total long-term debt The following transactions have also occurred at FP: $1,000,000 5,000,000 6,000,000 $12,000,000 1. Options were granted on July 1, 2018, to purchase 200,000 shares at $15 per share. Although no options were exercised during fiscal year 2019, the average price per ordinary share during fiscal year 2019 was $20 per share. 2. Each bond was issued at face value. The convertible bonds will convert into ordinary shares at 50 shares per $1,000 bond. It is exercisable after 5 years and was issued in 2017. The interest on the liability component of the convertible bonds payable for the fiscal year ending June 30, 2019, was $450,000. 3. The preference shares were issued in 2017. 4. There are no preference dividends in arrears; however, preference dividends were not declared in fiscal year 2019. 5. The 1,000,000 ordinary shares were outstanding for the entire 2019 fiscal year. 6. Net income for fiscal year 2019 was $1,500,000, and the average income tax rate is 40%. Instructions: For the fiscal year ended June 30, 2019, calculate the following for FP Industries: (a) Basic earnings per share. (b) Diluted earnings per share