Assume that the following data relatives to King Company for 2013 is available:

Net Income$2,100,000

Transactions in Common SharesChangeCumulative

Jan. 1, 2013, Beginning number700,000

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

June 1, 2013, Stock split 2-1640,0001,280,000

Nov. 1, 2013, Issuance of shares180,0001,460,000

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 2013, $30 (market price and option price

adjusted for split).90,000 shares

Instructions

(a)Compute the basic earnings per share for 2013.(5 marks)

(b)Compute the diluted earnings per share for 2013. (6 marks)