Question

Vesuvius Company has net sales revenue of $786,000, cost of goods sold of $346,200,net income of $151,200, and preferred dividends of $13,000 during the current year. At the beginning of the year, 491,000 shares of common stock were outstanding, and, at the end of the year, 543,000 shares of common stock were outstanding.A total of 4,000 preferred shares were outstanding throughout the year. The company’s earnings per share for the current year is closest to:

Answer 1

Answer:

$0.27

Explanation:

Earnings per share is the total earnings attributable to common stockholders divided by the weighted average number of common stock.

total earnings attributable to common stockholders=net income-preferred stock dividends

net income is $151,200

preferred dividends is $13,000

earnings attributable to common stock=$151,200-$13,000=$138,200.00

weighted average number of common stock=(491,000+543,000)/2  = 517,000.00  

EPS=$138,200/ 517,000=$ 0.27