Question

O Exercise 11-17 Earnings per share LO A1 Kelley Company reports $1,475,000 of net income and declares $206,500 of cash dividends on its preferred stock for the year. At year-end, the company had 370,000 weighted average shares of common stock 1. What amount of net income is available to common stockholders? Book Net income To preferred stockholders Net income available to common stockholders S Print orongo 2. What is the company's basic EPS? Basic Eamings per Share Choose Denominator: Choose Numerator: Basic Earings per Share Basic earnings per share

Answer 1

1)net income available for common stockholders

Particular	amount ($)
Net income	1475000
(-) preferred stock holders	(206500)
Net income available to common stock holders	1268500

  NET income available for common stockholders = $1268500

2) computing basic earnings per share

earnings per share = net income available to common stock holders/weighted average shares of common stock

= $1268500/370000= 3.43

EPS = 3.43

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