Calculation of EPS and retained earnings Everdeen Mining, Inc., ended 2015 with
ID: 2730437 • Letter: C
Question
Calculation of EPS and retained earnings Everdeen Mining, Inc., ended 2015 with net profits before taxes of $427,000. The company is subject to a 40% tax rate and must pay $63,200 in preferred stock dividends before distributing any earnings on the 168,000 shares of common stock currently outstanding. Calculate Everdeen's 2015 earnings per share (EPS). If the firm paid common stock dividends of $0.84pcr share, how many dollars would go to retained earnings? The firm's EPS is $ (Round to the nearest cent.)Explanation / Answer
a)
Particulars
Amount
Net Profit before tax
427,000
Less: Tax @ 40%
(170,800)
Net Profit after Tax
256,200
Less: Pref Dividend
(63,200)
Earnings Avaialble for Common stock holders
193,000
Common Stock Outstanding
168,000
EPS
1.15
b)
Earnings Avaialble for Common stock holders
193,000
Less: Dividend paid (0.84 x 168,000)
(141,120)
Retained Earnings
51,880
Particulars
Amount
Net Profit before tax
427,000
Less: Tax @ 40%
(170,800)
Net Profit after Tax
256,200
Less: Pref Dividend
(63,200)
Earnings Avaialble for Common stock holders
193,000
Common Stock Outstanding
168,000
EPS
1.15
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