Question

Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,790,000...

Assume that the following data relative to Kane Company for 2018 is available:

Net Income $2,790,000
Transactions in Common Shares Change Cumulative
Jan. 1, 2018, Beginning number 680,000
Mar. 1, 2018, Purchase of treasury shares (66,600) 613,400
June 1, 2018, Stock split 2-1 613,400 1,226,800
Nov. 1, 2018, Issuance of shares 234,000 1,460,800
6% Cumulative Convertible Preferred Stock
Sold at par, convertible into 200,000 shares of common (adjusted for split). $1,000,000
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). 81,000 shares

1. Compute weighted average shares outstanding for 2018.

2. Compute the basic earnings per share for 2018.

3. Compute the diluted earnings per share for 2018.

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