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Henriksen Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 10% (issued at face amount) $250,000 Preferred $1 stock, $10 par 250,000 Common stock, $25 par 250,000 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) $87,500, (b) $112,500, and (c) $137,500. 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  $

Henriksen Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 10% (issued at face amount) $250,000 Preferred $1 stock, $10 par 250,000 Common stock, $25 par 250,000 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) $87,500, (b) $112,500, and (c) $137,500. 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  $

FINANCIAL ACCOUNTING
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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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) $250,000
Preferred $1 stock, $10 par 250,000
Common stock, $25 par 250,000

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) $87,500, (b) $112,500, and (c) $137,500.

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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