On January 1, 2018, Tonge Industries had outstanding 540,000 common shares ($1 par) that originally sold for $30 per share, and 3,000 shares of 10% cumulative preferred stock ($100 par), convertible into 30,000 common shares. On October 1, 2018, Tonge sold and issued an additional 20,000 shares of common stock at $43. At December 31, 2018, there were 25,000 incentive stock options outstanding, issued in 2017, 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 $680,000. The tax rate for the year was 40%. Required: Compute basic and diluted EPS for the year ended December 31, 2018. (Enter your answers in thousands.) Answer is complete but not entirely correct. Numerator Denominator Earnings per share 1.19 Basic = $ 650,000 680,000 545,000 580,000 Diluted $ $ 1.17