Richetti Corporation started the year ended November 30, 2018, with 162,000 comm

Question

Richetti Corporation started the year ended November 30, 2018, with 162,000 common shares and no preferred shares issued. The following changes in share capital occurred during the year: Feb. 28 Issued 46,080 common shares for $759,000. Sept. 4 Issued 54,800 $1 cumulative preferred shares for $1,370,000. Nov.1 Issued 19,320 common shares in exchange for land. The shares were trading for $21 on this date and the fair value of the land was $390,820. 30 Reported net income of $984,300. 30 Declared the quarterly cash dividend to the preferred shareholders of record on December 14, payable on December 31 Calculate the income available for the common shareholders. Income available to common shareholders LINK TO TEXT Calculate the weighted average number of common shares for the year. Weighted average number of common shares LINK TO TEXT Calculate the basic earnings per share for the year. (Round answer to 2 decimal places, e.g. 52.75 Basic earnings per share s LINK TO TEXT

Explanation / Answer

Basic earning per share = Income available to common shareholders / Weighted average number of common shares

= 929500 / 203620

=$ 4.56 Per share

Income available to common shareholders = Net Income = 984300 Less- Preferred stockholder's Dividend 54800 Income available to common shareholders = 929500

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