The Health corp reported net income for 2015 of $ 177,500. Health began the year with 100,000 shares of $5 par value common shares outstanding and 2,500 shares of $ 100 par value 8% preferred shares outstanding. On October 1, Health sold 10,000 shares of stock for $6 per share. Health paid ividends to the common shareholders in December.
1- what is the weighted average number of common shared used to compute earning per share for 2015 ( is it 100,000 or 102,500 or 105,000 or 110,000?)
2- what is the basic earings for 2015 ( is it $1.43 or $1.50 or $1.54 or$1.73 per share?)
3- if each share of preferred stock is convertible into 8 shares of common stock, what would be the diluted earnings for 201 (is it $1.29 or $1.45 or $1.54 or $1.73 per share?)