XYZ reported the following equity accounts on December 31 of this year:
| Liabilities: | |
| Bonds payable, 12 percent, nonconvertible | $200 |
| Shareholders’ equity: | |
| Preferred shares, $15 par, 7 percent, non-convertible, non-cumulative | 300 |
| Common shares, no par, 40 shares outstanding | 400 |
| Retained earnings | 120 |
Additional Information:
1) The Board of Directors declared a 10 percent stock dividend on all classes of shares on April 1, and issued these shares on August 1.
2) Income for the period was $88.
3) There were no share transactions during the year, other than the stock dividend.
The basic earnings per share amount is:
A) $1.52
B) $1.68
C) $2.00
D) $2.20
E) There would not be a basic earnings per share figure for XYZ this year.
Everdeen Mining, Inc., ended 2015 with net profits before taxes of $430,000. The company is subject to a 40% tax rate and must pay $62,600 in preferred stock dividends before distributing any earnings on the $171,000 shares of common stock currently outstanding.
a) The firms EPS is __________.
b) If the firm paid common stock dividends of .84 cents per share the amount that would go to retained earnings is __________.
In 2015, Esther Corporation reported a net income of $650,000. It declared and paid preferred stock dividends of $50,000 and common stock dividends of $60,000. During 2015, Esther had a weighted average of 150,000 common shares outstanding. Compute Esther’s 2015 earnings per share.
a. $1.95
b. $4.00
c. $5.00
d. None of the above.
Beck Incorporation reported a net income of $450,000 for the year 2013. It declared and paid dividends of $75,000 to its preferred stockholders and $50,000 to its common stockholders. During the year, Beck had an average of 100,000 common shares outstanding. Compute Beck’s earnings per share for the year 2013.
A. $4.50 per share
B. $4.00 per share
C. $3.75 per share
D. $3.25 per share
