At January 1, 2020, Langley Company's outstanding shares included the following. 280,000 shares of $50 par value, 7% cumulative preferred stock 900,000 shares of $1 par value common stock Net income for 2020 was $2,530,000. No cash dividends were declared or paid during 2020. On February 15, 2021, however, all preferred dividends in arrears were paid, together with a 5% stock dividend on common shares. There were no dividends in arrears prior to 2020. On April 1, 2020, 450,000 shares of common stock were sold for $10 per share, and on October 1, 2020, 110,000 shares of common stock were purchased for $20 per share and held as treasury stock. Instructions Compute earnings per share for 2020. Assume that financial statements for 2020 were issued in March 2021.
At January 1, 2020, Langley Company's outstanding shares included the following. 280,000 shares of $50 par value, 7% cumulative preferred stock 900,000 shares of $1 par value common stock Net income for 2020 was $2,530,000. No cash dividends were declared or paid during 2020. On February 15, 2021, however, all preferred dividends in arrears were paid, together with a 5% stock dividend on common shares. There were no dividends in arrears prior to 2020. On April 1, 2020, 450,000 shares of common stock were sold for $10 per share, and on October 1, 2020, 110,000 shares of common stock were purchased for $20 per share and held as treasury stock. Instructions Compute earnings per share for 2020. Assume that financial statements for 2020 were issued in March 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
At January 1, 2020, Langley Company's outstanding shares included the following.
| 280,000 shares of $50 par value, 7% cumulative |
| 900,000 shares of $1 par value common stock |
Net income for 2020 was $2,530,000. No cash dividends were declared or paid during 2020. On February 15, 2021, however, all preferred dividends in arrears were paid, together with a 5% stock dividend on common shares. There were no dividends in arrears prior to 2020.
On April 1, 2020, 450,000 shares of common stock were sold for $10 per share, and on October 1, 2020, 110,000 shares of common stock were purchased for $20 per share and held as
Instructions
Compute earnings per share for 2020. Assume that financial statements for 2020 were issued in March 2021.
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