Question

The stockholders’ equity section of Sheridan Corporation appears below as of December 31, 2020.

8% preferred stock, $50 par value, authorized
92,800 shares, outstanding 82,800 shares				$4,140,000
Common stock, $1.00 par, authorized and issued 9,200,000 shares				9,200,000
Additional paid-in capital				18,860,000
Retained earnings		$123,280,000
Net income		30,360,000		153,640,000
				$185,840,000

Net income for 2020 reflects a total effective tax rate of 20%. Included in the net income figure is a loss of $16,560,000 (before tax) as a result of a non-recurring major casualty. Preferred stock dividends of $331,200 were declared and paid in 2020. Dividends of $920,000 were declared and paid to common stockholders in 2020.

Compute earnings per share data as it should appear on the income statement of Sheridan Corporation. (Round answers to 2 decimal places, e.g. 1.48.)

Answer 1

Answer:

Net Income to common stockholders = Net Income - Preferred stockholders dividend
=30,360,000-331,200
=30,028,800

Earning per share = (Net income to contribute common stockholders/Common outstanding shares)
=30,028,800/9,200,000 shares
=$3.26 per share