On January 1, 2018, Tonge Industries had outstanding 840,000 common shares ($1 par) that originally sold for $30 per share, and 5,000 shares of 10% cumulative preferred stock ($100 par), convertible into 50,000 common shares. On October 1, 2018, Tonge sold and issued an additional 16,000 shares of common stock at $40. 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 $980,000. 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.) Numerator Denominator Earnings per share 1 = Basic Diluted