On December 31, 2017, Dow Steel Corporation had 620,000 shares of common stock a

Question

On December 31, 2017, Dow Steel Corporation had 620,000 shares of common stock and 32,000 shares of 10%, noncumulative, no con e title preferred stock issued and outstanding. Dow issued a 5% common stock dividend on May 15 and paid cash dividends of $420,000 and S71,000 to common and preferred shareholders, respectively, on December 15, 2018. On February 28,2018, Dow retred on July 1. Dow's net income for the year ended December 31,2018, was $2200,000. The income tax rate is Required sold 64,000 common shares In keeping with its long-term share repurchase plan, 4,000 shares were Computé Dow's earnings per share for the year ended December 31, 2018. (Do not round, intermediate calculations. Enter your answers in thousands) 3 Answer is complete but not entirely correct. Earnings per 7333 0.32 Numerator Denominator S 2129 o

Explanation / Answer

Solution:

Numerator

Deniminator

EPS

2,129,000

671,333

3.17

Working:

?

Numerator : 2,200,000 - 71,000 = 2,129,000

Denominator:

1/1 – 12/31

620,000*12/12

620000

2/28 – 12/31

64,000*10/12

53333.33

7/1 – 12/31

4000*6/12

-2000

671333.3

?

Numerator

Deniminator

EPS

2,129,000

671,333

3.17

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