Disney works hard to reward its employees and shareholders. A review of the companys accounting records revealed the following capital structure as of December 31, 2020:

9% preferred stock, $100 par value, 5,000 shares issued and outstanding $500,000

Additional paid-in capital - preferred stock $110,000

Common stock, $10 par value, 200,000 shares issued and outstanding $2,000,000

Additional paid-in capital - common stock $550,000

Retained Earnings $778,000

Throughout 2021 the following transactions occurred impacting the common stock account of Disney:

January 1 .............Has a balance of 200,000 shares of$10 par value common stock

April 1...................Issued 125,000 shares for cash.

July 1 ...................Declared a 10% stock dividend.

October 1..............Acquired 7,000 shares of treasury stock.

November 1...........Declared a 2-for-1 stock split.

Furthermore, on January 1, 2021, there were stock options outstanding to purchase 75,000 shares of common stock at $26 share. Market prices for the stock at various times during the year were:

Price at 12/31 $24

Average market price during year $62

Also in existence on January 1, 2021, are 9% convertible bonds with a face value of 1,500,000, issued at par in 2015. The bonds are due in 2022, and until then, are convertible into common stock at the rate of 25 shares for each $1,000 bond. To date, none have been converted. The corporate tax rate is 40%.

A dividend on preferred stock was paid during the year, and there are no dividends in arrears atyear-end. There are not other capital transactions during the year. Net income for 2021 was $815,000.

Required:

1) Calculate the weighted average common stock outstanding.

2) Compute Basic and Diluted Earnings per Share(EPS) for 2021.