A corporation reported net sales of $360,000, net income of $20,000, average stockholders' equity of $1,000,000, and average common shares outstanding of 10,000 . It paid $4,000 of dividends to preferred stockholders. How much was its eamings per share? $4.00$1.60$16.67$2.67$0.06 A corporation reported net sales of $360,000, net income of $20,000,average stockholders' equity of $1,000,000, and average common sharesoutstanding of 10,000. It paid $4,000 of dividends to preferredstockholders. How much was its earnings per share?O $4.00O $1.60O $16.67O $2.67O $0.06

Step 1: Calculation of earnings per share.Earning per share = (Net Income - Preferred dividends) /…

A corporation reported net sales of $360,000, net income of $20,000, average stockholders' equity of $1,000,000, and average common shares outstanding of 10,000. It paid $4,000 of dividends to preferred stockholders. How much was its earnings per share? O $4.00 O $1.60 O $16.67 O $2.67 O $0.06

A corporation reported net sales of $360,000, net income of $20,000, average stockholders' equity of $1,000,000, and average common shares outstanding of 10,000. It paid $4,000 of dividends to preferred stockholders. How much was its earnings per share? O $4.00 O $1.60 O $16.67 O $2.67 O $0.06

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A corporation reported net sales of $360,000, net income of $20,000, average stockholders' equity of $1,000,000, and average common shares outstanding of 10,000 . It paid $4,000 of dividends to preferred stockholders. How much was its eamings per share?

$4.00

$1.60

$16.67

$2.67

$0.06

A corporation reported net sales of $360,000, net income of $20,000,
average stockholders' equity of $1,000,000, and average common shares
outstanding of 10,000. It paid $4,000 of dividends to preferred
stockholders. How much was its earnings per share?
O $4.00
O $1.60
O $16.67
O $2.67
O $0.06

Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.

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