1. On January 1, 2021, ABC Transportation Company had 200,000 shares of $0.25 par common stock outstanding. On May 1, 2021, ABC sold 30,000 shares of common stock for $56 per share.

ABC had the following preferred stock and bonds outstanding at January 1, 2021. All securities had been sold at par or face value.

Issue Date		Type of Security		Conversion Terms
5/1/2015		12%, $1,000 bonds, $750,000		None
1/1/2019		6% cumulative convertible preferred stock, $100 par, 40,000 shares outstanding		4 shares common for each share of preferred
1/1/2020		6%, convertible $1,000 bonds, $1,000,000		15 shares common for each $1,000 bond
6/30/2020		10%, convertible $1,000 bonds, $600,000		30 shares of common for each $1,000 bond
12/31/2020		8%, cumulative preferred stock, $50 par, 12,500 shares outstanding		None

ABC had stock options outstanding at January 1, 2021, for the purchase of 20,000 shares of common stock for $30 per share. On October 1, 2021, options were granted for the purchase of an additional 40,000 shares at $45 per share. The average market price of the common stock for 2021 was $60 per share.

ABC paid no dividends during 2021. The 2021 net income was $1,026,000. The income tax rate is 30%.

INSTRUCTIONS: Compute the basic and diluted earnings per share for ABC for 2021.