Sunland Inc. presented the following data. Net income $2,680,000 Preferred stock: 48,000 shares outstanding, $100 par,...

Sunland Inc. presented the following data.

Net income		$2,680,000
Preferred stock: 48,000 shares outstanding, $100 par, 8% cumulative, not convertible		4,800,000
Common stock: Shares outstanding 1/1		729,600
Issued for cash, 5/1		273,600
Acquired treasury stock for cash, 8/1		160,800
2-for-1 stock split, 10/1

Compute earnings per share. (Round answer to 2 decimal places, e.g. $2.55.)

Earnings per share

$enter earnings per share rounded to 2 decimal places

Solutions

Expert Solution

Answer

	Net Income	$ 2,680,000
Less:	Preferred Dividend	$ 384,000	(48000 x $ 100 x 8%)
	Earning for Common Stockholders	$ 2,296,000
	No. of Common Stock outstanding	1,684,800	(Workings)
	Earnings per share	1.36

	Computation of Common Stock outstanding

	Beginning outstanding	729,600
Add:	Issued	273,600
Less:	Acquired treasury stock	160,800
	Outstanding before stock split	842,400
	Outstanding after stock split	1,684,800	(842400 x 2)

ekkarill92 answered 1 year ago

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