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Question
Vesuvius Company has net sales revenue of $780,000, cost of goods sold of $343,200, net income of $119,200, and preferred dividends of $10,000 during the current year. At the beginning of the year, 503,000 shares of common stock were outstanding, and, at the end of the year, 537,000 shares of common stock were outstanding. A total of 1,000 preferred shares were outstanding throughout the year. The companys earnings per share for the current year is closest to:
A) $1.50.
B) $0.84.
C) $0.21.
D) $0.87.
Answer: C
Feedback:
Solution:
Earnings per share (EPS) = (Net income Preferred dividends) Average number of common shares outstanding
= ($119,200 $10,000) [(503,000 + 537,000) 2] = $0.21
Answer
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