Answered: Earnings per share on common stock…

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

Domanico Co., which produces and sells biking equipment, is financed as follows:

Bonds payable, 10% (issued at face amount)	$900,000
Preferred $1 stock, $10 par	900,000
Common stock, $25 par	900,000

Income tax is estimated at 40% of income.

Determine the earnings per share on common stock, assuming that the income before bond interest and income tax is (a) $279,000, (b) $369,000, and (c) $459,000.

Enter answers in dollars and cents, rounding to two decimal places.

a. Earnings per share on common stock $fill in the blank 1

b. Earnings per share on common stock $fill in the blank 2

c. Earnings per share on common stock $fill in the blank 3

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