A20-14 Basic and Diluted EPS
The following information relates to Willowdale Ltd.’s financialstatements for the year ended 31 December 20X6:
a. On 1 January 20X6, Willowdale’s capital structure consistedof the following:
| • | 450,000 common shares, issued for $5.75 million, wereoutstanding. |
| • | 50,000 preferred shares bearing cumulative dividend rights of$5 per year. |
| • | $1 million (par value) of 5% convertible bonds ($1,000 facevalue), with interest payable on 30 June and 31 December of eachyear. Each $1,000 bond is convertible into 65 common shares, at theoption of the holder, at any time before 31 December 20X1. Interestexpensed on the convertible bonds was $80,000. |
| • | Outstanding options for 50,000 common shares at a price of $5per share. The average market value of common shares during theperiod was $20. |
b. On 30 September 20X6, Willowdale issued an additional 100,000common shares for $1.5 million cash.
c. Willowdale reported earnings of $1.5 million for the year ended31 December 20X6 net of tax of 25%.
Required:
Calculate the basic and diluted earnings per share figures for20X6
