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X Your answer is incorrect. Try again. Sage Inc. presented the following data. $2,540,000 Net income Preferred stock: 54,000
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Answer #1
Earning Per Share $ 1.21

Explanation:

Events Dates outstanding Shares outstanding stock spilt restatement no of months/12 months weighted shares
A B C ( a×b×c)
Beg.Bal. Jan 1 - Dec 31 718,800 2 12 /12 1,437,600
Issued share May1-Aug 1 328,800 2 3 /12 164,400
Reacquired share Aug1- Dec31 165,600 2 5 /12 138,000
Weighted average no of shares out standing. =   1,740,000

EPS:

= ( Net income - pref div) ÷ weighte avg no of shares

= ( $ 2,540,000 - $ 432,000 ) ÷ 1,740,000

= $ 1.21

Pref Div:

$ 5,400,000 × 8%

= $ 432,000

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