On december 31 2011 Berclaor INC had 200 million shares of common stock and 2

On december 31 2011 Berclaor INC had 200 million shares of common stock and 2 million shares of 9% $100 par value cumulative preferred stock issued and
outstanding. Berclair issued a 5% common stock dividend on july 1 2012. On may 1 2012 Berclair purchased 15 million shares of its common stock as treasury
stock. Net Income for the year ended December 31 2012 was 140 million.

Also outstanding at December 31 were incentive stock options granted to key executives on September 13 2008. The options are exercisable as of september 13
2011 for 24 million common shares at an exercise price of $55 per share. During 2012 the market price of the common shares averaged $66 per share. The
options were exercised on October 1 2012.

1. Compute Berclairs basic and diluted earnings per share for the year ended December 31 2012. Show computation.

2. In addition Berclair has $50 million of 8% bonds convertible into 5 million common shares issued at face value in 2010. Compute Berclairs basic and
diluted earnings per share for the year ended December 31 2012. Assume its income tax rate is 40%.