Net income was $200,800 for the year. Throughout the year the company had outsta

Question

Net income was $200,800 for the year. Throughout the year the company had outstanding 12,000 shares of $3.00, $100 par value preferred stock and 103,000 shares of common stock. Required: Calculate basic earnings per share of common stock for the year. (Round "Earnings per share-basic" to 2 decimal places.)

Net income was $200,800 for the year. Throughout the year the company had outstanding 12,000 shares of $3.00, $100 par value preferred stock and 103,000 shares of common stock. Required: Calculate basic earnings per share of common stock for the year. (Round "Earnings per share-basic" to 2 decimal places.)

Net income was $200,800 for the year. Throughout the year the company had outstanding 12,000 shares of $3.00, $100 par value preferred stock and 103,000 shares of common stock. Required: Calculate basic earnings per share of common stock for the year. (Round "Earnings per share-basic" to 2 decimal places.) Net income was $200,800 for the year. Throughout the year the company had outstanding 12,000 shares of $3.00, $100 par value preferred stock and 103,000 shares of common stock. Required: Calculate basic earnings per share of common stock for the year. (Round "Earnings per share-basic" to 2 decimal places.)

Explanation / Answer

Dividend for preferred Stock = $12000*3 =$36000

Net income available for Shareholders = $200,800-$36000 = $172,800

Basic Earning Per Share = $172,800/103,000= $1.60

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