Financial statement data for the current year for Hanz Corp. are as follows:Line Item DescriptionAmountNet income$5,700,000Preferred dividends$70,000Average number of common shares outstanding200,000The earnings per share for the current year are?a.$28.15b.$28.50c.$28.85d.$0.35

Answered: Financial statement data for the…

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

Financial statement data for the current year for Hanz Corp. are as follows:

Line Item Description	Amount
Net income	$5,700,000
Preferred dividends	$70,000
Average number of common shares outstanding	200,000

The earnings per share for the current year are?

a.$28.15

b.$28.50

c.$28.85

d.$0.35

Expert Solution

Step 1

Earnings per share indicate the profits per share of common stockholders. It can be calculated by dividing available profit for common stocks holders by the average number of outstanding common stockholders. The available profit can be calculated by deducting the preferred dividend from the net income.