Problem

Lewis, Inc. began the year with 300,000 shares of common stock and 25,000 shares of 6%. $100 par value, cumulative, convertible preferred stock Each share of preferred stock is convertible into 4 shares of common stock on June 30, it purchased 10,000 shares of treasury stock. On November 1, Lewis declared a 2 for 1 stock split. Net income for the year was $850.000. Compute weighted average shares of common stock for the year, basic EPS, and diluted EPS. Write the EPS formula. Show all computations used in your solution.