On January 1, 2016, Tonge Industries had outstanding 840,000 common shares (par $1) that originally sold for $30 per share, and 5,000 shares of 10% cumulative preferred stock (par $100), convertible into 50,000 common shares. On October 1, 2016, Tonge sold and issued an additional 16,000 shares of common stock at $40. At December 31, 2016, there were incentive stock options outstanding, issued in 2015, and exercisable after one year for 25,000 shares of common stock at an exercise price of $40. The market price of the common stock at year-end was $58. During the year the price of the common shares had averaged $50. Net income was $980,000. 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.)