Getemin, Inc., had net income of $490,400 for its fiscal year ended October 31,

Question

Getemin, Inc., had net income of $490,400 for its fiscal year ended October 31, 2010. During the year the company had outstanding 36,300 shares of $3.20, $45 par value preferred stock, and 113,000 shares of common stock.

Calculate the basic earnings per share of common stock for fiscal 2010.

Getemin, Inc., had net income of $490,400 for its fiscal year ended October 31, 2010. During the year the company had outstanding 36,300 shares of $3.20, $45 par value preferred stock, and 113,000 shares of common stock.

Explanation / Answer

total earnings for common stock = 490,400 - 36300*3.20

=$374240

earnings per share for common stock = $374240/(no of common stocks)

= $374240/113000 = $3.312

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