Cyber Company had $100,000 shares of common stock outstanding on January 1 and December 31,2010 . In connection with the acquisition of a subsidiary company in July 2009 , Cyber is required to issue 10,000 additional shares of its common stock on July 2011, to the former owners of the subsidiary. In 2010, Cyber reported net income of $200,000 and paid $30,000 dividends to its preferred stockholders. Cyber's diluted earnings per share for 2010 should be $2.00 $1.82 $1.70 $1.55 For 2009, Cyber Company estimated its three-year equipment warranty costs based on $80 per unit sold in 2009. Experience during 2010 indicated that the estimate should have been based on $70 per unit. The effect of this $10 difference from the estimate is reported As a prior period adjustment to beginning retained earnings. As an accounting change requiring 2010 financial statements to be restated As an accounting change below 2010 income from continuing operation In 2010 income from continuing operations