EPS Junkyard Arts, Inc., had earnings of $192,000 for the year. The company had

Question

EPS Junkyard Arts, Inc., had earnings of $192,000 for the year. The company had 30,000 shares of common stock outstanding during the year and issued 4,000 shares of $100 par value preferred stock. The preferred stock has a dividend of $6 per share. There were no transactions in either common or preferred stock during the year. $100 Determine the basic earnings per share for Junkyard Arts for the year. Round answer to two decimal places Xperearingsper sharefrJnkardArtsfrthevear. Rourd enottosactions ineitherconn onoaprengdudstoche X per share

Explanation / Answer

Determination of Basic Earnings Per Share for Junkyard Arts Inc

Net income                                                                  $ 1,92,000

Less : Preferred dividend (4000 Shares x $6) $ 24,000

Net Income available to common shareholders          $ 1,68,000

Basic EPS ( $ 168000 / 30,000 Common shares)       $ 5.60/Share

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