Junkyard Arts, Inc., had earnings of $316,000 for 2016. The company had 40,000 s

Question

Junkyard Arts, Inc., had earnings of $316,000 for 2016. The company had 40,000 shares of The stock outstanding when a corporation has issued only one class of stock.common stock outstanding during the year. In addition, the company issued 15,000 shares of $50 The monetary amount printed on a stock certificate.par value A class of stock with preferential rights over common stock.preferred stock on January 9, 2016. The preferred stock has a Distributions of a corporation's earnings to stockholders.dividend of $1.60 per share. There were no transactions in either common or preferred stock during 2016.

Determine the basic earnings per share for Junkyard Arts. Round answer to two decimal places.
$per share

Explanation / Answer

Preferred dividend = 15000 * 1.60 = $ 24000

EPS = (Net income - preferred dividend) / Number of shares outstanding

                = ( 316000 -24000 ) / 40000

                = 292000 /40000

                = $ 7.30 per share

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.