On December 31, 2015, Dow Steel Corporation had 620,000 shares ofcommon stock and 32,000 shares of 10%, noncumulative, nonconvertiblepreferred stock issued and outstanding. Dow issued a 5% common stockdividend on May 15 and paid cash dividends of $420,000 and $71,000 tocommon and preferred shareholders, respectively, on December 15,2016.On February 28, 2016, Dow sold 64,000 common shares. In keeping withits long-term share repurchase plan, 4,000 shares were retired on July 1.Dow's net income for the year ended December 31, 2016, was$2,200,000. The income tax rate is 40%.Compute Dow's earnings per share for the year ended December 31,2016.

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Answered: On December 31, 2015, Dow Steel…

Financial Accounting

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ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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