1. On December 31, 2016, Gary Company had 50,000 shares of common stock outstanding for the entire year. On March 1, 2017, Gary purchased 2,400 shares of common stock on the open market as treasury stock paying $45 per share. Gary sold 600 of the treasury shares on June 1, 2017, for $47 per share. Gary issued a 10% common stock dividend on 7/2/2017.

In addition, Gary had 3,000 shares of 9%, $50 par value, noncumulative convertible preferred stock outstanding at December 31, 2016. Preferred dividends for 2017 amounted to $13,500. Each convertible preferred stock can be converted into two shares of common stock. No convertible preferred stock had been converted by 12/31/2017.

Net income for 2017 was $180,905. The income tax rate is 30%. Other relevant information is as follows:

1. Outstanding at December 31, 2016, were stock option giving key personnel the option to buy 20,000 (adjusted for the stock dividends) common shares at $40. During 2017, the average market price of the common shares was $50 (adjusted for the stock dividends on December 31, 2017. No stock option was exercised during the year.

2. $100,000, 9% bonds were issued at a premium on December 20, 2016. None of the bonds had been converted by December 31, 2017. Bond interest expense of $8,700 was recorded in 2017. The premium is being amortized at $300 in 2017. Each $1,000 bond is convertible into 20 shares of common stock.

3. $500,000 of 8% bonds was issued at a discount on October 10, 2016. None of the bonds had been converted by December 31, 2017. Each $1,000 bond is convertible into 24 shares of common stock.

(a)Compute the weighted average shares of 2017 for Gary Company.

(b)Compute the basic and diluted earnings per share of 2017 for Gary company