Question
In: Accounting
On December 31, 2017, Dow Steel Corporation had 660,000 shares of common stock and 36,000 shares...
On December 31, 2017, Dow Steel Corporation had 660,000 shares
of common stock and 36,000 shares of 10%, noncumulative,
nonconvertible preferred stock issued and outstanding. Dow issued a
5% common stock dividend on May 15 and paid cash dividends of
$460,000 and $75,000 to common and preferred shareholders,
respectively, on December 15, 2018.
On February 28, 2018, Dow sold 56,000 common shares. In keeping
with its long-term share repurchase plan, 2,000 shares were retired
on July 1. Dow's net income for the year ended December 31, 2018,
was $2,400,000. The income tax rate is 40%.
Required:
Compute Dow's earnings per share for the year ended December 31,
2018. (Do not round intermediate calculations.
Enter your answers in
thousands.)
Solutions
Expert Solution
| Numerator (Basic
EPS): Net income = $2,400,000; Preferred dividends = $75,000 (because the preferred stock is noncumulative, only include the dividends that are actually paid). |
|||||||||||||
| Denominator (Basic EPS): Weighted average # shares of common stock outstanding. | |||||||||||||
| Period | Weight | Weighted Avg no of shares | |||||||||||
| 01/01 - 12/31 | 660000 shares*12/12 | 660000 | |||||||||||
| 02/28 - 12/31 | 56000 shares *10/12 | 46666.66667 | |||||||||||
| 07/01-12/31 | -2000 shares sold*6/12 | -1000 | |||||||||||
| Weighted average # shares | 705666.6667 | ||||||||||||
| EPS = ($2400000-$75000)/7056670share | |||||||||||||
| 0.329475517 | |||||||||||||
| Numerator (Basic
EPS): Net income = $2,400,000; Preferred dividends = $75,000 (because the preferred stock is noncumulative, only include the dividends that are actually paid). |
|||||||||||||
| Denominator (Basic EPS): Weighted average # shares of common stock outstanding. | |||||||||||||
| Period | Weight | Weighted Avg no of shares | |||||||||||
| 01/01 - 12/31 | 660000 shares*12/12 | 660000 | |||||||||||
| 02/28 - 12/31 | 56000 shares *10/12 | 46666.66667 | |||||||||||
| 07/01-12/31 | -2000 shares sold*6/12 | -1000 | |||||||||||
| Weighted average # shares | 705666.6667 | ||||||||||||
| EPS = ($2400000-$75000)/705667share | |||||||||||||
| 3.29475517 | |||||||||||||
ekkarill92 answered 1 year agoRelated Solutions
On December 31, 2020, Dow Steel Corporation had 660,000 shares of common stock and 306,000 shares...
On December 31, 2020, Dow Steel Corporation had 660,000 shares
of common stock and 306,000 shares of 10%, noncumulative,
nonconvertible preferred stock issued and outstanding. Dow issued a
5% common stock dividend on May 15 and paid cash dividends of
$460,000 and $75,000 to common and preferred shareholders,
respectively, on December 15, 2021.
On February 28, 2021, Dow sold 56,000 common shares. In keeping
with its long-term share repurchase plan, 2,000 shares were retired
on July 1. Dow's net income...
On December 31, 2017, Dow Steel Corporation had 670,000 shares of common stock and 37,000 shares...
On December 31, 2017, Dow Steel Corporation had 670,000 shares
of common stock and 37,000 shares of 7%, noncumulative,
nonconvertible preferred stock issued and outstanding. Dow issued a
4% common stock dividend on May 15 and paid cash dividends of
$470,000 and $76,000 to common and preferred shareholders,
respectively, on December 15, 2018.
On February 28, 2018, Dow sold 51,000 common shares. Also, as a
part of a 2017 agreement for the acquisition of Merrill Cable
Company, another 30,000 shares...
On December 31, 2017, Dow Steel Corporation had 790,000 shares of common stock and 49,000 shares...
On December 31, 2017, Dow Steel Corporation had 790,000 shares
of common stock and 49,000 shares of 7%, noncumulative,
nonconvertible preferred stock issued and outstanding. Dow issued a
4% common stock dividend on May 15 and paid cash dividends of
$590,000 and $88,000 to common and preferred shareholders,
respectively, on December 15, 2018.
On February 28, 2018, Dow sold 72,000 common shares. In keeping
with its long-term share repurchase plan, 6,000 shares were retired
on July 1. Dow's net income...
On December 31, 2017, Dow Steel Corporation had 710,000 shares of common stock and 41,000 shares...
On December 31, 2017, Dow Steel Corporation had 710,000 shares
of common stock and 41,000 shares of 7%, noncumulative,
nonconvertible preferred stock issued and outstanding. Dow issued a
4% common stock dividend on May 15 and paid cash dividends of
$510,000 and $80,000 to common and preferred shareholders,
respectively, on December 15, 2018. On February 28, 2018, Dow sold
63,000 common shares. In keeping with its long-term share
repurchase plan, 4,000 shares were retired on July 1. Dow's net
income...
On December 31, 2017, Dow Steel Corporation had 700,000 shares of common stock and 40,000 shares...
On December 31, 2017, Dow Steel Corporation had 700,000 shares
of common stock and 40,000 shares of 10%, noncumulative,
nonconvertible preferred stock issued and outstanding. Dow issued a
5% common stock dividend on May 15 and paid cash dividends of
$500,000 and $79,000 to common and preferred shareholders,
respectively, on December 15, 2018. On February 28, 2018, Dow sold
64,000 common shares. In keeping with its long-term share
repurchase plan, 6,000 shares were retired on July 1. Dow's net
income...
On December 31, 2017, Dow Steel Corporation had 730,000 shares of common stock and 43,000 shares...
On December 31, 2017, Dow Steel Corporation had 730,000 shares
of common stock and 43,000 shares of 9%, noncumulative,
nonconvertible preferred stock issued and outstanding. Dow issued a
5% common stock dividend on May 15 and paid cash dividends of
$530,000 and $82,000 to common and preferred shareholders,
respectively, on December 15, 2018.
On February 28, 2018, Dow sold 60,000 common shares. In keeping
with its long-term share repurchase plan, 2,000 shares were retired
on July 1. Dow's net income...
On December 31, 2017, Dow Steel Corporation had 620,000 shares of common stock and 32,000 shares...
On December 31, 2017, Dow Steel Corporation had 620,000 shares
of common stock and 32,000 shares of 10%, noncumulative,
nonconvertible preferred stock issued and outstanding. Dow issued a
5% common stock dividend on May 15 and paid cash dividends of
$420,000 and $71,000 to common and preferred shareholders,
respectively, on December 15, 2018.
On February 28, 2018, Dow sold 64,000 common shares. Also, as a
part of a 2017 agreement for the acquisition of Merrill Cable
Company, another 20,000 shares...
On December 31, 2017, Dow Steel Corporation had 700,000 shares of common stock and 40,000 shares...
On December 31, 2017, Dow Steel Corporation had 700,000 shares
of common stock and 40,000 shares of 10%, noncumulative,
nonconvertible preferred stock issued and outstanding. Dow issued a
5% common stock dividend on May 15 and paid cash dividends of
$500,000 and $79,000 to common and preferred shareholders,
respectively, on December 15, 2018.
On February 28, 2018, Dow sold 64,000 common shares. In keeping
with its long-term share repurchase plan, 6,000 shares were retired
on July 1. Dow's net income...
On December 31, 2017, Dow Steel Corporation had 720,000 shares of common stock and 42,000 shares...
On December 31, 2017, Dow Steel Corporation had 720,000 shares
of common stock and 42,000 shares of 8%, noncumulative,
nonconvertible preferred stock issued and outstanding. Dow issued a
4% common stock dividend on May 15 and paid cash dividends of
$520,000 and $81,000 to common and preferred shareholders,
respectively, on December 15, 2018.
On February 28, 2018, Dow sold 66,000 common shares. Also, as a
part of a 2017 agreement for the acquisition of Merrill Cable
Company, another 19,000 shares...
On December 31, 2017, Dow Steel Corporation had 750,000 shares of common stock and 45,000 shares...
On December 31, 2017, Dow Steel Corporation had 750,000 shares
of common stock and 45,000 shares of 7%, noncumulative,
nonconvertible preferred stock issued and outstanding. Dow issued a
4% common stock dividend on May 15 and paid cash dividends of
$550,000 and $84,000 to common and preferred shareholders,
respectively, on December 15, 2018.
On February 28, 2018, Dow sold 60,000 common shares. In keeping
with its long-term share repurchase plan, 2,000 shares were retired
on July 1. Dow's net income...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Search the Internet to find (at least 2 websites) related to the general field of malware....
- Consider the following schema: Suppliers(sid, sname, address) Parts(pid, pname, color) Catalog(sid, pid, cost) write the following...
- Singh Development Co. is deciding whether to proceed with Project X. The cost would be $12...
- CS2123 Data Structures - Fall 2019 Assignment 1: Function Runtimes Table Due 9/11/19 by 11:59pm Completing...
- Question 2. Design a 16-1 MUX using any number of lower MUXs, such as 8-1 or...
- . Write a function that takes, as arguments, two objects, value1 and value2. If
- Wii Brothers, a game manufacturer, has a new idea for an adventure game. It can market...
ADVERTISEMENT