QUESTION 1 (8 MARKS)

Earnings per share-basic and diluted 1. Greenwich Corporation had net income of $1,712,500 in 2015. The company had 300,000 shares of $4 par value common stock and 25,000 shares of 8%, $100 par, preferred stock outstanding throughout the year. Each share of preferred stock is both cumulative and convertible. Each share of preferred stock is convertible into four shares of common stock. Compute the following for 2015:

1.1. Basic Earnings per share ($ _________per share)

1.2. The number of shares to be used in computing diluted earnings per share