Problem 5: E16-21 (LO4) (EPS: Simple Capital Structure) At January 1, 2017, Langley Companys outstanding shares included the following.

280,000 shares of $50 par value, 7% cumulative preferred stock

900,000 shares of $1 par value common stock

Net income for 2017 was $2,530,000. No cash dividends were declared or paid during 2017. On February 15, 2018, however, all preferred dividends in arrears were paid, together with a 5% stock dividend on common shares. There were no dividends in arrears prior to 2017.

On April 1, 2017, 450,000 shares of common stock were sold for $10 per share, and on October 1, 2017, 110,000 shares of common stock were purchased for $20 per share and held as treasury stock.

Instructions: Compute earnings per share for 2017. Assume that financial statements for 2017 were issued in March 2018.