Third time submitting this question. Please expain each step. I cannot learn if

Question

Third time submitting this question. Please expain each step. I cannot learn if I do not know each step. Thank you.

Gwinnett Park Co. reported net income of $916,800 for its fiscal year ended September 30, 2013. At the beginning of that year, 150,000 shares of common stock were outstanding. On February 1. 2013, an additional 30,000 shares were issued. On August 1, 2013, 12,000 shares were purchased as treasury stock. During the year, the company paid the annual dividend on 44,000 shares at 8%, $60 par value preferred stock that were outstanding during the entire fiscal year. Calculate the earnings per share of common stock for the year ended September 30, 2013.

Explanation / Answer

Preferred dividend = Par value *Number of shares* rate

                                = 60 *44000* .08 = 211200

Weighted average number of common shares = [150000*1/12] + [180000*6/12] + [168000*5/12]

                          = 12500+ 90000+ 70000

                         = 172500 shares

EPS = [nET income -preferred dividend ]/Weighted avergae shares

        = [916800- 211200 ] / 172500

         = 705600 / 172500

            = $ 4.09 per share

Number of shares outstanding Period of outstanding(months) 1 jan 150000 1 1feb 150000+30000=180000 6 1 aug 180000-12000= 168000 5

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