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On July 21, 2021, Hardaway issued a 25% stock dividend on its common stock. On December 12, it paid $50,000 cash dividends on the preferred stock. Net income for the year ended December 31, 2021, was $2,000,000. Required: Compute Hardaway's earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Do not round intermediate calculations.)

Respuesta :

hyderali230

Answer:

Earning per share is $1.95

Explanation:

Number of outstanding shares = Common stock + ( Stock dividend )

Number of outstanding shares = 800,000 + ( 800,000 x 25% )

Number of outstanding shares = 800,000 + 200,000 = 1,000,000

Earning Per share = ( Net Income - Preferred Dividend ) / Number of outstanding share

Earning Per share = ( $2,000,000 - $50,000 ) / 1,000,0000 share

Earning Per share = $1,950,000 / 1,000,0000 share

Earning per share = $1.95

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