Problem 19-17 EPS; options; convertible preferred; additional shares [LO19-4, 19-5, 19-6, 19-7, 19-8, 19-9]

On January 1, 2018, Tonge Industries had outstanding 460,000 common shares ($1 par) that originally sold for $25 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 12,000 shares of common stock at $35. At December 31, 2018, there were 21,000 incentive stock options outstanding, issued in 2017, and exercisable after one year for 21,000 shares of common stock at an exercise price of $32. The market price of the common stock at year-end was $50. During the year, the price of the common shares had averaged $42. Net income was $600,000. 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.)