QUESTION 2 Assume that the following data relative to Kane Company for 2021 is available: Net Income $2,100,000 Change Transactions in Common Shares Jan. 1, 2021, Beginning number Mar. 1, 2021, Purchase of treasury shares June 1, 2021, Stock split 2-1 Nov. 1, 2021, Issuance of shares (60,000) 640,000 240,000 Cumulative 700,000 640,000 1,280,000 1,520,000 6% Cumulative Convertible Preferred Stock Sold at par, convertible into 200,000 shares of common (adjusted for split). $1,000,000 Stock Options Exercisable at the option price of $25 per share. Average market price in 2021, $30 (market price and option price adjusted for split). 90,000 shares Instructions 1. Compute the basic earnings per share for 2021 (10 points). (Round to the nearest penny.) (Hint: Compute the weighted average shares outstanding during the year first) 2. Compute the diluted earnings per share for 2021 (15 points). (Round to the nearest penny.) (Hint: Compute the additional shares for purposes of diluted earnings per share first: Hint2: Pay attention to the convertible preferred stock