Question

Concord Corporation had 2020 net income of $809,000. During 2020, Concord paid a dividend of $2 per share on 60,500 shares of preferred stock. During 2020, Concord had outstanding 215,000 shares of common stock.
Required:
Compute Concord's 2020 earnings per share.

Answer 1

Answer:

$3.2 per share

Explanation:

Earnings per share = Net income - (preferred stock shares × dividend paid] ÷ Outstanding shares of common stock

= [($809,000 - ( 60,500 × $2 per share)] ÷ 215,000

= [$809,000 - ( $121,000)] ÷ 215,000

= $809,000 - $121,000 ÷ 215,000

= $688,000 ÷ 215,000

= $3.2 per share