Use the following information for questions 1 and 2.
Gilley Co. had 200,000 shares of common stock, 20,000 shares of convertible preferred stock, and $1,000,000 of 10% convertible bonds outstanding during 2007. The preferred stock is convertible into 40,000 shares of common stock. During 2007, Gilley paid dividends of $.90 per share on the common stock and $3.00 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 2007 was $600,000 and the income tax rate was 30%.
1. Basic earnings per share for 2007 is (rounded to the nearest penny)
2. Diluted earnings per share for 2007 is (rounded to the nearest penny)
This solution provides calculations for determining basic earnings per share and diluted earnings per share.