On January 1, 2018, Tonge Industries had outstanding 740,000 common shares ($1 par) that originally sold for $20 per share, and 7,000 shares of 10% cumulative preferred stock ($100 par), convertible into 70,000 common shares. On October 1, 2018, Tonge sold and issued an additional 20,000 shares of common stock at $41. At December 31, 2018, there were 24,000 incentive stock options outstanding, issued in 2017, and exercisable after one year for 24,000 shares of common stock at an exercise price of $38. The market price of the common stock at year-end was $56. During the year, the price of the common shares had averaged $48. Net income was $880,000. 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.) X Answer is complete but not entirely correct. Numerator Denominator = Earnings per share Basic $ II $ 1.09 810,000 X 1 880,000 745,000 X 820,000 Diluted $ = 1.07