Chapter 8, Problem 8.1.2MBA

To determine

Concept Introduction:

Basic Earnings per share:

The Basic Earnings per share is the amount of net income earned by each common share outstanding. The Earnings per share calculated by with help of following formula:

  $\text{Basic Earnings per share=}\frac{\text{Net Income - Preferred Dividend}}{\text{Weighted Average Common Shares Outstanding}}$

  $\begin{array}{l} \hfill \\ NetIncomeavailabletocommonstockholder=Netincome–PreferredDividend\hfill \end{array}$

Notes payable:

Notes payable is a liability which represents the loan taken by the business of the business transactions. A note payable can be issued by a debtor to its creditor for the liability of payments for issuing supplies.

To Indicate:

The effect of the payment of note and interest on maturity on net assets and EPS