Gwinnett Park Co. reported net income of $916,800 for its fiscal year ended Sept

Question

Gwinnett Park Co. reported net income of $916,800 for its fiscal year ended September 30, 2013. At the beginning of that year, 150,000 shares of common stock were outstanding. On February 1. 2013, an additional 30,000 shares were issued. On August 1, 2013, 12,000 shares were purchased as treasury stock. During the year, the company paid the annual dividend on 44,000 shares at 8%, $60 par value preferred stock that were outstanding during the entire fiscal year. Calculate the earnings per share of common stock for the year ended September 30, 2013.

Explanation / Answer

no of shares no of months weighted no of shares opening 150000 12 1800000 1-Feb-13 30000 8 240000 1-Aug-13 -12000 2 -24000 WANOS 2016000 net income 916800 Less:dividend to prf sh 211200 net income for eq shares 705600 WANOS 2016000 EPS 0.35

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