On December 31, 2017, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $400,000 and $75,000 to common and preferred shareholders, respectively, on December 15, 2018. On February 28, 2018, Dow sold 60,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2018, was $2,100,000. The income tax rate is 40%. Required: Compute Dow's earnings per share for the year ended December 31, 2018. (Do not round intermediate calculations. Enter your answers in thousands.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On December 31, 2017, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares
of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common
stock dividend on May 15 and paid cash dividends of $400,000 and $75,000 to common and preferred
shareholders, respectively, on December 15, 2018. On February 28, 2018, Dow sold 60,000 common
shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net
income for the year ended December 31, 2018, was $2,100,000. The income tax rate is 40%. Required:
Compute Dow's earnings per share for the year ended December 31, 2018. (Do not round intermediate
calculations. Enter your answers in thousands.)
Transcribed Image Text:On December 31, 2017, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $400,000 and $75,000 to common and preferred shareholders, respectively, on December 15, 2018. On February 28, 2018, Dow sold 60,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2018, was $2,100,000. The income tax rate is 40%. Required: Compute Dow's earnings per share for the year ended December 31, 2018. (Do not round intermediate calculations. Enter your answers in thousands.)
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