Stanley Department Stores reported net income of $720,000 for the year ended December 31, 2018.

Additional Information:

Common shares outstanding at Jan. 1, 2018 ...................................................80,000

Incentive stock options (vested in 2017) outstanding throughout 2018 ....................24,000

(Each option is exercisable for one common share at an exercise price of $37.50.)

During the year, the market price of Stanley's common stock averaged $45 per share.

On Aug. 30, Stanley sold 15,000 common shares.

Stanley's only debt consisted of $50,000 of 10% short term bank notes.

The company's income tax rate is 40%.

Required:

Compute Stanley's basic and diluted earnings per share for the year ended December 31, 2018.