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Hardaway Fixtures' balance sheet at December 31, 2020, included the following: Shares issued and outstanding: Common...

Hardaway Fixtures' balance sheet at December 31, 2020, included the following: Shares issued and outstanding: Common stock, $1 par $ 800,000 Nonconvertible preferred stock, $50 par 20,000 On July 21, 2021, Hardaway issued a 25% stock dividend on its common stock. On December 12, it paid $50,000 cash dividends on the preferred stock. Net income for the year ended December 31, 2021, was $2,000,000. Required: Compute Hardaway's earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Do not round intermediate calculations.)

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Answer #1

Answer:

Computation of Hardaway's earnings per share for the year ended December 31, 2021:

Net Income = $2,000,000

Cash Dividend on Preferred stocks = $50,000

Share issued and outstanding weighted-average = 800,000 (common stock shares) × 1.25

=1,000,000 shares

Hardaway's Earnings per share = (Net Income - Cash Dividend on Preferred stocks) ÷ shares issued and outstanding weighted-average

=( $2,000,000 - $50,000) ÷ 1,000,000 shares

Hardaway's Earnings per share = $1.95

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