Compute the basic earnings per share for 2014 round to the

Question

Assume that the following data relative to Kane Company for 2014 is available.  Cumulative preferred stock and stock options were outstanding prior to 1/1/14:

• Net Income: $2,100,000

• Transactions in Common Shares

1/1/14:       700,000 common shares outstanding

3/1/14:       Purchased 60,000 treasury shares

6/1/14:       2-for-1 stock split

11/1/14:     120,000 new shares issued for cash

• 8% Cumulative Convertible Preferred Stock

         Sold at par, convertible into 200,000 shares of common, $1,000,000

• Stock Options

         60,000 options exercisable at $25 per share. Average market price in 2014, $30

Required:

1. Compute the basic earnings per share for 2014. (Round to the nearest penny.)

2. Compute the diluted earnings per share for 2014. (Round to the nearest penny.)