Question

In 2017, moreno cheeses had a net income of $42,390, paid preferred dividends of $6,000, and had 18,000 shares of common stock outstanding. what was their earnings per share for 2017?

Answer 1

To answer the question above, we subtract the preferred dividends from the net income. That is,
                                 $42,390 - $6,000 = $36,390
Then, to determine the earnings per share, we simply divide the obtained value above by the number of shares. That is,
                                  $36,390 / 18,000 = $2.02