Reference no: EM13854592

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.)