Fultz Company had 300,000 shares of common stock issued and outstanding at Decem

Question

Fultz Company had 300,000 shares of common stock issued and outstanding

at December 31,

2012. During 2013, no additional common stock was issued. On January 1,

2013, Fultz issued

400,000 shares of nonconvertible preferred stock. During 2013, Fultz de

clared and paid $210,000

cash dividends on the common stock and $175,000 on the nonconvertible prefe

rred stock. Net

income for the year ended December 31, 2013, was $1,120,000. What sh

ould be Fultz's 2013

earnings per common share, rounded to the nearest penny?

Explanation / Answer

Earnings per share = net income - prefered dividend / Number of shares outstanding

                               = 1120000 - 175000 / 300000

                                = 3.15

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

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