Assume that the following data relative to Kane Company for 2014 is available. Cumulative preferred stock and stock options were outstanding prior to 1/1/14:

• Net Income: $2,100,000

• Transactions in Common Shares

1/1/14: 700,000 common shares outstanding

3/1/14: Purchased 60,000 treasury shares

6/1/14: 2-for-1 stock split

11/1/14: 120,000 new shares issued for cash

• 8% Cumulative Convertible Preferred Stock

Sold at par, convertible into 200,000 shares of common, $1,000,000

• Stock Options

60,000 options exercisable at $25 per share. Average market price in 2014, $30

Required:

• Compute the basic earnings per share for 2014. (Round to the nearest penny.)

• Compute the diluted earnings per share for 2014. (Round to the nearest penny.)

ACCT 802 Written Assignment #5 Deadline: your solution is to be submitted via Blackboard no later than the deadline specified on your course schedule. Assume that the following data relative to Kane Company for 2014 is available. Cumulative preferred stock and stock options were outstanding prior to 1/1/14: Net Income: $2,100,000 Transactions in Common Shares 1/1/14: 700,000 common shares outstanding 3/1/14: Purchased 60,000 treasury shares 6/1/14: 2-for-1 stock split 11/1/14: 120,000 new shares issued for cash 8% Cumulative Convertible Preferred Stock Sold at par, convertible into 200,000 shares of common, $1,000,000 Stock Options 60,000 options exercisable at $25 per share. Average market price in 2014, $30 Required: 1. Compute the basic earnings per share for 2014. (Round to the nearest penny.) 2. Compute the diluted earnings per share for 2014. (Round to the nearest penny.) 1