2. Assume that the following data relative to Kane Company for 2013 is available:

Net Income $2,100,000

Transactions in Common Shares Change Cumulative

Jan. 1, 2013, Beginning number 700,000

Mar. 1, 2013, Purchase of treasury shares (60,000) 640,000

June 1, 2013, Stock split 2-1 640,000 1,280,000

Nov. 1, 2013, Issuance of shares 180,000 1,460,000

8% Cumulative Convertible Preferred Stock

Sold at par, convertible into 200,000 shares of common

(adjusted for split). $1,000,000

Instructions

(a) compute average number of shares outstanding for 2013.

(b) Compute the basic earnings per share for 2013. (Round to the nearest penny.)