Answer:
a. $6.54 per share
b. $1.73 per share
Explanation:
The computation is shown below:
1. Earning per share is
= Net income ÷ shares of common stock outstanding
where,
Net income is
= Sales - costs - depreciation expense - interest expense - tax expense
= $664,000 - $326,000 - $70,000 - $45,000 - $49,060
= $173,940
The tax expense is
= (Sales - costs - depreciation expense - interest expense) × tax rate
= ($664,000 - $326,000 - $70,000 - $45,000) × 22%
= $49,060
Now the earning per share is
= $173,940 ÷ 26,600 shares
= $6.54 per share
b. Dividend per share = (Total dividend) ÷ (number of shares)
= ($46,000) ÷ (26,600 shares)
= $1.73 per share
