The balance sheets at the end of each of the first two years of operations indic

Question

The balance sheets at the end of each of the first two years of operations indicate the following: 2012 2011 Total current assets $600,000 $560,000 Total investments 60,000 40,000 Total property, plant, and equipment 900,000 700,000 Total current liabilities 125,000 65,000 Total long-term liabilities 350,000 250,000 Preferred 9% stock, $100 par 100,000 100,000 Common stock, $10 par 600,000 600,000 Paid-in capital in excess of par-common stock 75,000 75,000 Retained earnings 310,000 210,000 If net income is $115,000 and interest expense is $30,000 for 2012, what are the earnings per share on common stock for 2012, (round to two decimal places)? a. $2.07 b. $1.92 c. $1.77 d. e. $1.64 None of the above

Explanation / Answer

Net Income 115000 Less : Div on Pref.Stock 9000 Income Available for Common Stock 106000 No. of Common Stock 60000 Earning Per Share 1.77

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