Question - Cartagena Corporation has net income of $281,000 for the year ended December 31, 2012 and common shares outstanding of 100,000. Cartagena Corporation did not issue or repurchase additional common shares during the year. Cartagena corporation had 5,000 shares of convertible preferred stock, convertible into 2 shares of common stock for each share of preferred stock. Dividends paid during the year were $30,000 on the preferred stock and $100,000 on the common stock. The current tax rate applicable to Cartagena Corporation is 30%. Compute Cartagena corporation's basic EPS and diluted EPS for the year ended December 31, 2012.