Question

Junkyard Arts, Inc., had earnings of $454,700 for the year. The company had 50,000 shares of common stock outstanding during the year and issued 3,300 shares of $150 par value preferred stock. The preferred stock has a dividend of $9 per share. There were no transactions in either common or preferred stock during the year.

Answer 1

Answer:

EPS 8.5

Questions:

Earning per share for the year

Explanation:

$EPS = \frac{income-preferred \: dividends}{outstanding \: common \: stock}$

From the net income we subtract the preferred dividends and then, divide among the common stock

Income 454700

preferred dividend 29700 ( 3,300 shares x $9per share)

Oustanding common stock 50000

$EPS = \frac{454700-29700}{50000}$

EPS 8.5