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ABC was formed on June 30, 2011, through the issuance of 2,500,000 shares of common stock...

ABC was formed on June 30, 2011, through the issuance of 2,500,000 shares of common stock to owners. The company had the following transactions during 2014. On April 1, 2014, the company issued an additional 500,000 shares of stock for cash. On July 1, 2014, ABC issued $1 million of 15-year, 6% convertible bonds at par. Each $1,000 bond converts to 25 shares of common at any interest date. None of the bonds have been converted to date. ABC is preparing its annual report for the fiscal year ending December 31, 2014, and will report after-tax net income of $13,600,000. The tax rate is 40%.

1) Calculate Basic Earnings per Share and Diluted Earnings per Share.

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