Junkyard Arts Inc had earnings of 319600 for the year The co

Junkyard Arts, Inc., had earnings of $319,600 for the year. The company had 53,000 shares of common stock outstanding during the year and issued 4,400 shares of $50 par value preferred stock. The preferred stock has a dividend of $10 per share. There were no transactions in either common or preferred stock during the year. Determine the basic earnings per share for Junkyard Arts for the year. Round answer to two decimal places. $ per share

Solution

Solution:

319600 net income - 44000 (4400 x 10) preferred dividend requirements
= $275600 available to common shareholders
275600 / 53000 = $5.20 EPS