Ecker Company reports $1,350,000 of net income for 2017 and declares $189,000 of

Question

Ecker Company reports $1,350,000 of net income for 2017 and declares $189,000 of cash dividends on its preferred stock for 2017. At the end of 2017, the company had 380,000 weighted-average shares of common stock. 1. What amount of net income is available to common stockholders for 20177 Net income To preferred stockholders Net income available to common stockholders 2. What is the company's basic EPS for 2017? Basic Earnings per Share Choose Numerator Choose Denominator: Basic Earnings per Sha Basic eanings per share re

Explanation / Answer

Answer:-1)-The amount of net income is available to common stockholders for 2017:-

= Net income – preferred dividends

= $1350000 - $189000 =$1161000

2)- Company’s basic EPS for 2017:-

   = (Net income – Preferred dividends)/Weighted Average Common Shares Outstanding

= $1161000/380000 shares =$3.06 per share

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