Question

Ringmeup Inc. had net income of $182,300 for the year ended December 31, 2019. At the beginning of the year, 40,000 shares of common stock were outstanding. On May 1, an additional 18,000 shares were issued. On December 1, the company purchased 4,500 shares of its own common stock and held them as treasury stock until the end of the year. No other changes in common shares outstanding occurred during the year. During the year, Ringmeup paid the annual dividend on the 8,000 shares of 4.55%, $100 par value preferred stock that were outstanding the entire year. Required: Calculate basic earnings per share of common stock for the year ended December 31, 2019. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Earnings per share

Answer 1

Solution Jan I Common shares outstanding shares Issued Shares purchased 40000 12000 ſ18000 XB/13] May I Decl (375) [4500X1/12) 5 1625 prefered stock devidends = 8000 X 100 X 4.55% = 36400 Earnings per share = (Net Income - preferred stock I average number of Common Shares outstanding welal = ( 182300 — 36400) / 51625 = 2.82