Question

Washington Enterprises had net income for 2016 of? $103,000. Washington had? 39,000 shares of common stock outstanding at the beginning of the year and? 43,000 shares of common stock outstanding at the end of the year. There were? 6,000 shares of preferred stock outstanding all year. During? 2016, Washington declared and paid preferred dividends of? $29,000. What is? Washington's earnings per? share? (Round the answer to two decimal? places.)

Answer 1

Washington's earning per share is $1.08. Earning per share is an indicator that shows company's level of profitability. Earning per share is a portion of company's income divided by each common shares issued. We can calculate earning per share by using this formula: (Net Income - Preferred stock dividend)/((Common stock beginning + Common stock end year)/2).