Reference no: EM132724730

One company had 40,000 common shares outstanding for all of 2020. In addition, the company had 20,000 convertible preferred shares outstanding, issued in 2019. Each Preferred stock is convertible into two common shares. On August 1, 2020, 18,000 preferred shares were converted to common shares. Also, the company issued 30,000 options on July 1, 2020. Options allow you to buy 30,000 common shares at $ 25 per share. The average market price for the second half of 2020 was $ 30 per action. On October 1, 2020, 12,000 options were exercised.

Problem 1. Calculate the weighted average number of common shares outstanding for the purposes of the Basic earnings per share for the year 2020 and for the diluted earning per share for the year 2020. Provide the process (If you could use excel its better)