On January 1, 2021, Tonge Industries had outstanding 720,000 common shares ($1 par) that originally sold for $30 per share, and 6,000 shares of 10% cumulative preferred stock ($100 par), convertible into 60,000 common shares. On October 1, 2021, Tonge sold and issued an additional 16,000 shares of common stock at $39. At December 31, 2021, there were 23,000 incentive stock options outstanding, issued in 2020, and exercisable after one year for 23,000 shares of common stock at an exercise price of $36. The market price of the common stock at year-end was $54. During the year, the price of the common shares had averaged $46. Net income was $860,000. The tax rate for the year was 25%. Required: Compute basic and diluted EPS for the year ended December 31, 2021.