Basic and Diluted Earnings Per Share
Chamaa Ltd Instructions
Calculate Basic and Diluted Earnings Per Share for 2020

Basic and diluted earnings per share
Chamaa Ltd. provides the following information for 2020 $\begin{array}{l}\text{ 1. Net income } & \$ 560,000 \\ \\ \text{ 2. Capital structure } \\\quad\text{ a) Convertible 6 \% bonds. Each of the 300, \$ 1,000 bonds is convertible } \\ \quad\quad\text{ into 50 common shares for the next 10 years } & 300,000 \\ \quad\text{ b) Common shares, 200,000 shares is sued and outstanding during the entire year } & 2,000,000 \\ \quad\text{ c) Stock options outstanding to buy 16,000 common shares at } \$ 20 per share. \\\\ \text{ 3. Other information } \\\quad\text{ a) Bonds converted during 2020 } & None \\\quad\text{ b) Income tax rate } & 30\% \\\quad\text{ c) Convertible debt was outstanding the entire year } \\\quad\text{ d) Aver age market price per common share dur ing 2020 } & \$32 \\\quad\text{ e) Stock options were outstanding the entire year } \\\quad\text{ f) Stock options exercised during 2020 } & None \\\end{array}$ Instructions
Calculate basic and diluted earnings per share for 2020.