Use the table for the question(s)below.

-Refer to the income statement above.For the year ending December 31,2006 Luther's earnings per share are closest to:
A)$1.01
B)$1.04
C)$1.58
D)$4.04

Question

Use the table for the question(s)below.
 
-Refer to the income statement above.For the year ending December 31,2006 Luther's earnings per share are closest to:
A)$1.01 
B)$1.04 
C)$1.58 
D)$4.04

Quizplus · Accepted Answer

To calculate earnings per share, we divide net income available to common shareholders by the weighted average number of common shares outstanding. In this case, net income available to common shareholders is $16,680,000 ($17,300,000 net income - $620,000 preferred dividends). The weighted average number of common shares outstanding is 16,000,000. Therefore, earnings per share are $1.04 ($16,680,000 ÷ 16,000,000).

Use the Table for the Question(s)below