On January 1, 2012, Peanut Corporation acquires an 80% interest in Sunny Corporation. Information regarding the income and equity structure of the two companies as of the year ended December 31, 2014, is as follows:

Peanut Corp. Sunny Corp.

Internally generated net income $55,000 $56,000

Common shares outstanding during the year 20,000 12,000

Warrants to acquire Peanut stock, outstanding during the year 2,000 1,000

5% convertible (into Sunny's shares) $100 par preferred shares

Outstanding during the year 800

Nonconvertible preferred shares outstanding 1,000

 

Additional information is as follows:

 

a) The warrants to acquire Peanut stock are issued in 2013. Each warrant can be exchanged for one share of Peanut common stock at an exercise price of $12 per share.

b) Each share of convertible preferred stock can be converted into two shares of Sunny common stock. The preferred stock pays an annual dividend totaling $4,000. Peanut owns 60% of the convertible preferred stock.

c) The nonconvertible preferred stock is issued on July 1, 2014, and pays a 6-month dividend totaling $500.

d) Relevant market prices per share of Peanut common stock during 2014 are as follows:

 

Average

First quarter $10

Second quarter 12

Third quarter 13

Fourth quarter 16

 

Compute the basic and diluted consolidated EPS for the year ended December 31, 2014. Use quarterly share averaging.