Effect of Financing on Earnings per Share Henriksen Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 10% (issued at face amount) $1,900,000 Preferred $2 stock, $20 par 1,900,000 Common stock, $25 par 1,900,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $684,000, (b) $874,000, and (c) $1,064,000. Enter answers in dollars and cents, rounding to two decimal places. a. Earnings per share on common stock b. Earnings per share on common stock $ c. Earnings per share on common stock $ 00
Effect of Financing on Earnings per Share Henriksen Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 10% (issued at face amount) $1,900,000 Preferred $2 stock, $20 par 1,900,000 Common stock, $25 par 1,900,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $684,000, (b) $874,000, and (c) $1,064,000. Enter answers in dollars and cents, rounding to two decimal places. a. Earnings per share on common stock b. Earnings per share on common stock $ c. Earnings per share on common stock $ 00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Effect of Financing on Earnings per Share
Henriksen Co., which produces and sells biking equipment, is financed as follows:
Bonds payable, 10% (issued at face amount)
$1,900,000
Preferred $2 stock, $20 par
1,900,000
Common stock, $25 par
1,900,000
Income tax is estimated at 40% of income.
Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $684,000, (b) $874,000, and (c) $1,064,000.
Enter answers in dollars and cents, rounding to two decimal places.
a. Earnings per share on common stock
b. Earnings per share on common stock $
c. Earnings per share on common stock $
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