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Tam Companys net income for the year ending December 31, 2017, was $10,000. During the year, Tam declared and paid $1,000 ca

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Calculation of 2017 earnings per common share of Tam company

(a) Calculation of net income attributable to common shareholders

Particulars Amount($)

Net income for the year 10000

Less : Preference dividend 1000

Net income attributable to common shareholders 9000

(b) Calculation of weighted average number of shares

= (10000*12/12)+(2000*6/12) = 11000

Basic earnings per common share = net income attributable to common shareholders/weighted avg no of shares

= $9000/11000 = $0.82

Diluted earnings per share = $10000/16000 = $0.625

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