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X Take a Test - Alex Grubish - Google Chrome • Secure | https://www.mathxl.com/Student/PlayerTest.aspx?testid=181179733&centerwin;=yes Acct 2001 (Sect 03/04), Spring 2018 Alex Grubish 2 4 /10/18 3:29 PM Quiz: Ch 11 Quiz (20 pts) Submit Quiz This Question: 2 pts 4 of 13 (3 complete) This Quiz: 20 pts possible Padowski Corporation's net income for the current year is $500,000. At year end, the corporation had outstanding 6,500 shares of 15%, $100 par value nonconvertible preferred stock and 17,000 shares of $10 par value common stock. No shares were issued or retired during the year. What is basic earnings per share? (Round your final answer to the nearest cent) OA. $23.68. O B. $17.13 O C. $2941 OD. $100.00 Click to select your answer.

Explanation / Answer

Basic Earning Per Share is $23.68

The formula for Basic EPS is = (Net income - preferred dividend) / weighted average common shares.

The preferred dividend is = 6500 x $100 x 15% = $97,500

Basic EPS = ($5,00,000 - $97,500) / 17,000 Shares

                  = $4,02,500/ 17,000 Shares

                  = $23.68 per share

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