Exercise 1618 Pronghorn Inc presented the following data Net

Exercise 16-18 Pronghorn Inc. presented the following data Net income Preferred stock: 52,000 shares outstanding, $100 par, 9% cumulative, not convertible Common stock: Shares outstanding 1/166,400 $2,350,00o 5,200,000 Issued for cash, 5/1 Acquired treasury stock for cash, 8/1 2-for-1 stock split, 10/1 270,000 148,800 Compute earnings per share. (Round answer to 2 decimal places,e.g.$2.55.) Earnings per share Click if you would like to show work for this question: opensomm

Solution

Earnings per share = Net Income after Preference/ Weighted outstanding number of shares

Net Income                                                                                           $ 23,50,000
Less : Preferred Dividends                                                                   $   4,68,000
Net Income after Preference Dividend                                                 $ 18,82,000

Begininng                                                                                                 6,86,400
Issued on 5/1                                           (2,70,000*8/12)                       1,80,000
Less: Acquired treasury stock 8/1           (1,48,800*5/12)                         - 62,000
Total number of stocks                                                                             8,04,400
Add: Stock Split                                                                                        8,04,400
Weighted outstanding number of shares                                                16,08,800

Earnings per share = $ 18,82,000 / 16,08,800 = $ 1.17