1. What are the disclosure requirements associated with basic earnings per share computations? ( 5 marks)

2.On December 31, 2010, the Momentum Company had 150,000 shares of common stock issued and outstanding.

On April 1, 2011, an additional 30,000 shares of common stock were issued. Momentums net income for the year ended December 31, 2011, was $517,500.

During 2011, Momentum declared and paid $300,000 in cash dividends on its nonconvertible preferred stock and $100,000 on its common stock. The basic earnings per common share, rounded to the nearest cent, for the year ended December 31, 2011, should be; (10 marks)