Question

Riverview Inc. reports the following balances and amounts. The following information is presented in random order. Accounts payable, $35,000 Cash provided by operations, 90,000 Accounts receivable, 37,500 Net income, 36,000 Average common shares, 20,000 Salaries and wages payable, 8,000 Average current liabilities, 110,000 Stockholders’ equity, 240,000 Average total assets, 600,000 Current assets, 300,000 Average total liabilities, 320,000 Current liabilities, 120,000 Dividends paid to preferred shareholders, 10,000 How much is earnings per share?

Answer 1

Answer:

The earning per share is $1.3 per share

Explanation:

For computing the earning per share, we need to apply the formula of Earning per share which is shown below:

Earning per share = (Net income - Dividends paid to preferred shareholders) ÷ average common shares

= ($36,000 - $10,000) ÷ $20,000 shares

= $1.3 per share

The other items which are mentioned in the question are not relevant. Kindly ignored it.