Earnings per shareFinancial statement data for the years 20Y5 and 20Y6 for Black Bull Inc. follow: 20Y520Y6Net income$1,761,000 $2,532,500 Preferred dividends$60,000 $60,000 Average number of common shares outstanding90,000shares115,000sharesa. Determine the earnings per share for 20Y5 and 20Y6. Round to two decimal places. 20Y520Y6Earnings per Share$fill in the blank 1 $fill in the blank 2 b. Is the change in the earnings per share from 20Y5 to 20Y6 favorable or unfavorable?fill in the blank

Requirement:-a Earning per share =(Net income -prefer ence dividend)/common shares outstanding Year 20Y5 =($1,761,000-$60,000)/90,000 =$18.9 per share Year 20Y6 =($2,532,500-$60,000)/115,000 =$21.5 per share Requirement:-b Change in the earnings per share from 20Y5 to 20Y6 is =$21.5-$18.9 =$2.6 Favorable or unfavorable =Favorable

Answered: Earnings per share Financial statement…

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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Earnings per share

Financial statement data for the years 20Y5 and 20Y6 for Black Bull Inc. follow:

20Y5 20Y6

Net income $1,761,000 $2,532,500

Preferred dividends $60,000 $60,000

Average number of common shares outstanding 90,000 shares 115,000 shares

a. Determine the earnings per share for 20Y5 and 20Y6. Round to two decimal places.

20Y5 20Y6

Earnings per Share $fill in the blank 1 $fill in the blank 2

b. Is the change in the earnings per share from 20Y5 to 20Y6 favorable or unfavorable?

fill in the blank

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