(Computatio n o f Basi c an d Dilute d

(Computatio n o f Basi c an d Dilute d EPS ) The information below pertains to Barkley Company for 2015. Net income for the year $1200000 7% convertible bonds issued at par ($1000 per bond); each bond is convertible into 30 shares of common stock 2000000 6% convertible cumulative preferred stock $100 par value; each share is convertible into 3 shares of common stock 4000000 Common stock $10 par value 6000000 Tax rate for 2015 40% Average market price of common stock $25 per share There were no changes during 2015 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 75000 shares of common stock at $20 per share. Instructions (a) Compute basic earnings per sha r e for 2015. (b) Compute diluted earnings per sha r e for 2015.