P 19-17 EPS; options; convertible preferred; additional shares LO19-4 through LO19-9 On January 1, 2021, Tonge Industries had outstanding 440,000 common shares ($1 par) that originally sold for $20 per share, and 4,000 shares of 10% cumulative preferred stock ($100 par), convertible into 40,000 common shares. On October 1, 2021, Tonge sold and issued an additional 16,000 shares of common stock at $33. At Decem- ber 31, 2021, there were 20,000 incentive stock options outstanding, issued in 2020, and exercisable after one year for 20,000 shares of common stock at an exercise price of $30. The market price of the common stock at year-end was $48. During the year, the price of the common shares had averaged $40. Net income was $650,000. The tax rate for the year was 25%. Required: Compute basic and diluted EPS for the year ended December 31, 2021. At January 1, 2021, Canaday Corporation had outstanding the following securities: P 19-18 EPS; stock options; nonconvertible preferred; convertible bonds, shares sold LO19-4 through LO19-9 600 million common shares 20 million 6% cumulative preferred shares, $50 par 6.4% convertible bonds, $2,000 million face amount, convertible into 80 million common shares The following additional information is available: On September 1, 2021, Canaday sold 72 million additional shares of common stock. Incentive stock options to purchase 60 million shares of common stock after July 1, 2020, at $12 per share, were outstanding at the beginning and end of 2021. The average market price of Canaday's common stock was $18 per share during 2021. Canaday's net income for the year ended December 31, 2021, was $1,476 million. The effective income tax rate was 25%. Required: 1. Calculate basic earnings per common share for the year ended December 31, 2021. 2. Calculate the diluted earnings per common share for the year ended December 31, 2021