On January 1, 2016, Tonge Industries had outstanding 780,000 common shares (par $1) that originally sold for $30 per share, and 9,000 shares of 10% cumulative preferred stock (par $100), convertible into 90,000 common shares.

On October 1, 2016, Tonge sold and issued an additional 16,000 shares of common stock at $34. At December 31, 2016, there were incentive stock options outstanding, issued in 2015, and exercisable after one year for 28,000 shares of common stock at an exercise price of $30. The market price of the common stock at year-end was $48. During the year the price of the common shares had averaged $40.

Net income was $920,000. The tax rate for the year was 40%.

Required:

Compute basic and diluted EPS for the year ended December 31, 2016. (Enter your answers in thousands.)