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Umbatya Company is preparing its annual income statement for 2014 and

Umbatya Company is preparing its annual income statement for 2014 and 2015. Income from continuing operations after taxes was $1,840,000 and $2,370,000, respectively for 2014 and 2015. Umbatya Company also experienced an extraordinary loss of $630,000 after taxes due to an earthquake on March 3, 2015. The tax rate is 40%.As of January 1, 2014, Umbatya Company has 40,000 shares of $100 par value, 6% noncumulative, nonconvertible preferred stock. Dividends were not declared or paid in fiscal year 2014 but were declared and paid on December 31, 2015. Umbatya Company also has 14,000 stock options with an exercise price of $20 per share. Average market price of common stock is $17 per share in fiscal year 2014 and $18 per share in fiscal year 2015.On January 1, 2014, Umbatya Company had 1,000,000 shares of $1 par common stock outstanding. On April 1, 2014, Umbatya Company issued an additional 400,000 shares of common stock. Umbatya Company also distributed a 15% stock dividend on common shares on July 1, 2014. On November 1, 2014, Umbatya Company repurchased 30,000 shares of common stock as treasury stock. Umbatya Company issued an additional 750,000 shares of common stock on May 1, 2015 and repurchased 60,000 shares of the treasury stock October 1, 2015.Instructions:1. Calculate Umbatyas 2014 and 2015 Weighted Average Common Shares Outstanding (10 points)2. Prepare Umbatyas Basic Earnings per Share (EPS) income statement presentation for 2014 and 2015. (10 points)

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