Financial statement data for the years ended December 31 for

Financial statement data for the years ended December 31 for Dovetail Corporation follow:

a. Determine the earnings per share for 20Y3 and 20Y2. Round your answers to two decimal places.

b. Does the change in the earnings per share from 20Y2 to 20Y3 indicate a favorable or an unfavorable trend?

	20Y3	20Y2
Net income	$332,250		$312,000
Preferred dividends	$51,000		$51,000
Average number of common shares outstanding	75,000	shares	60,000	shares

Since earnings per share increased from 20Y2 to 20Y3, we can say that there is a favorable trend

	Requirement a:
	Determination of Earnings per share:
	Particulars	20Y3	20Y2
A	Net Income	332250	312000
B	Preferred Dividends	51000	51000
C	Earnings available to equity shareholders	281250	261000
	(A-B)
D	Average number of common shares outstanding	75000	60000
E	Earnings per Share (C/D)	3.75	4.35


	Requirement b:
	Change in Earnings per share:
	Particulars	20Y3	20Y2
A	Earnings per share	3.75	4.35
B	Increase in Earnings per share (4.35-3.75)		0.60