Graham, Inc. began 2020 with 25,000 common shares outstanding and issued a 20% stock dividend on August 1. The company issued 6,000 shares on December 1. Graham also has 18,000 shares of 9%, $20 par, cumulative preferred stock outstanding on which no dividends have been paid during either 2019 or 2020. Net income for 2020 was $175,600. Required: Compute Graham, Inc.'s basic earnings per share for 2020. If required, round your answer to two decimal places.
Graham, Inc. began 2020 with 25,000 common shares outstanding and issued a 20% stock dividend on August 1. The company issued 6,000 shares on December 1. Graham also has 18,000 shares of 9%, $20 par, cumulative preferred stock outstanding on which no dividends have been paid during either 2019 or 2020. Net income for 2020 was $175,600. Required: Compute Graham, Inc.'s basic earnings per share for 2020. If required, round your answer to two decimal places.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Graham, Inc. began 2020 with 25,000 common shares outstanding and issued a 20% stock dividend on August 1. The company issued 6,000 shares on December 1. Graham also has 18,000 shares of 9%, $20 par, cumulative preferred stock outstanding on which no dividends have been paid during either 2019 or 2020. Net income for 2020 was $175,600.
Required:
Compute Graham, Inc.'s basic earnings per share for 2020. If required, round your answer to two decimal places.
Expert Solution
Step 1
Earnings per share of the company means all earnings available for each and every common shareholder. Earnings available for common shareholders means net income after payment of preference dividends.
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