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Assume that the following data relative to Kane Company for 2018 is available:
| Net Income | | | | | $2,760,000 | |
| | | | | | | |
| Transactions in Common Shares | | Change | | | Cumulative | |
| Jan. 1, 2018, Beginning number | | | | | 720,000 | |
| Mar. 1, 2018, Purchase of treasury shares | | (61,200) | | | 658,800 | |
| June 1, 2018, Stock split 2-1 | | 658,800 | | | 1,317,600 | |
| Nov. 1, 2018, Issuance of shares | | 240,000 | | | 1,557,600 | |
| | | | | | | |
| 6% Cumulative Convertible Preferred Stock | | | | | | |
| Sold at par, convertible into 210,000 shares of common (adjusted for split). | | | | | $1,050,000 | |
| | | | | | | |
| Stock Options | | | | | | |
| Exercisable at the option price of $25 per share. Average market price in 2018, $30 (market price and option price adjusted for split). | | | | | 99,000 | shares |
1- Compute weighted average shares outstanding for 2018.
| Weighted average shares outstanding | | |
2- Compute the basic earnings per share for 2018.
Basic Earnings per share $
3- Compute the diluted earnings per share for 2018.
| Diluted earnings per share | | $ |
Answer & Explanation
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