Question

Elite Trailer Parks has an operating profit of $250,000. Interest expense for the year was $32,000; preferred dividends paid were $32,700; and common dividends paid were $38,300. The tax was $63,500. The firm has 24,100 shares of common stock outstanding.

a. Calculate the earnings per share and the common dividends per share for Elite Trailer Parks. (Round your answers to 2 decimal places.)

b. What was the increase in retained earnings for the year?  
  

Answer 1

Op Profit	$ 250,000.00
Interest	$ 32,000.00
PBT	$ 218,000.00	Less Interest
Tax	$ 63,500.00
NI	$ 154,500.00
No of shares	24100
EPS	$               6.41	(NI/Shares)

Common Dividends per share

$               1.59

(38300/24100)

Increase in Retained earnings = NI- dividends paid
=154,500-38300-32700=$83,500