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 And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter12: Corporations: Organization, Stock Transactions, And Dividends

Section: Chapter Questions

Problem 8BE: Earnings per share Financial statement data for the years 20Y5 and 20Y6 for Black Bull Inc. follow:...

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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.