EPS OBJ. 7 Junkyard Arts, Inc., had earnings of $316,000 for 2016. The company had 40,000 shares of common stock outstanding during the year. In addition, the company issued 15,000 shares of $50 par value preferred stock on January 9, 2016. The preferred stock has a dividend of

$1.60 per share. There were no transactions in either common or preferred stock during 2016.

Determine the basic earnings per share for Junkyard Arts.