1. Basic and diluted EPS. Assume that the following data relative to Kane Company for 2010 is available: Net Income $2,100,000 Transactions in Common Shares Change Cumulative Jan. 1, 2010, Beginning number 700,000 Mar. 1, 2010, Purchase of treasury shares (60,000) 640,000 June 1, 2010, Stock split 2-1 640,000 1,280,000 Nov. 1, 2010, Issuance of shares 120,000 1,400,000 8% 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 2010, $30 (market price and option price adjusted for split). 60,000 shares Instructions (a) Compute the basic earnings per share for 2010. (Round to the nearest penny.) (b) Compute the diluted earnings per share for 2010. (Round to the nearest penny.)