Question

the balance sheet at the end of each of the first two years of operations indicate the following

                               2012.               2011
current assets.         600000.         560000
total investments.     60000.            40000
property plant & equip 900000.     700000
total current liab.        125000.          65000
long term liab.            350000.         250000
pref. 9% stock 100 par. 100000.       100000
common stock $10 par. 600000.     600000
paid in capital in excess of par common stock
                                           75000.       75000
retained earnings.           310000.       210000

If net income is 115000 and interest expense is 30000 for 2012 what are the earnings per share on common stock for 2012 round to two decimal places

Answer 1

Earnings Available to Common Stock Equity holders
Net Income	$ 1,15,000.00
less: Preference Dividend ($100,000*9%)	$       9,000.00
Earnings Available to Common Stock Equity holders	$ 1,06,000.00
Total Par Value of Common Stock holder Equity	$ 6,00,000.00
par value Per Common Stock	$             10.00
Number of Common Stock Outstanding ($600,000/$10)	60,000
Earnings per share = net income Available to Common Stock holders /number of Common stock holders equity =$106000/60,000 =$1.77