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Morgs Morgs
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6 years ago
A corporation has 3,000 shares, 10% preferred stock of $50.00 par preferred stock, and 6,000 shares of common stock outstanding. The net income for the year is $290,000. Calculate earnings per share. (Round your answer to the nearest cent.)
A) $50.00
B) $45.83
C) $48.33
D) $96.67
Textbook 
Horngren's Accounting

Horngren's Accounting


Edition: 11th
Authors:
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#1
6 years ago
 B
Explanation:  B) Earnings per share = (Net Income - Preferred dividend) / Weighted average number of common shares outstanding

Net income$290,000
Less: Preferred dividend*15,000
Earnings available to common stockholders275,000
Common shares outstanding/  6,000
Earnings per share$45.83

*Preferred dividend = 3,000  $50.00  10% = $15,000
Morgs Author
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#2
6 years ago
Going to mark this solved!
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#3
6 years ago
Perfect
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