Reference no: EM132494765

For 2020, Westmount Corp. had 200,000 common shares outstanding for the full year. Westmount follows IFRS. Market prices of the common shares during 2020 were:

January 1: $45; Year's average: $50; December 31: $52.

Westmount's income tax rate is 40%.

During 2020, there were:

1. 40,000 outstanding stock options to buy common shares at $40 a share.
2. $3,000,000 of 6% convertible bonds issued at par. Each $1,000 bond is convertible into 20 common shares.
3. 20,000 preferred shares each paying a $3 dividend and each convertible to 1 common share.
4. The corporation reported $900,000 net income for calendar 2020.

Instructions

Question 1: Calculate basic and diluted earnings per share for 2020. Show all calculations for possible part marks. Arrange your answer as per the method used in the text