Shamrock Company had net income of $30,000.On January 1,there were 8,000 shares of common stock outstanding.On April 1,the company issued an additional 2,000 shares of common stock.The company declared a $2,700 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company has an earnings per share of:
A)$2.87
B)$2.73
C)$3.41
D)$3.16
E)$3.75

Question

Quizplus · Accepted Answer

Earnings per share = Net income / Weighted average number of shares outstandingWeighted average number of shares outstanding = (8,000 shares x 3/4 year) + (2,000 shares x 1/4 year) = 8,500 sharesEarnings per share = $30,000 / 8,500 shares = $2.87

Shamrock Company Had Net Income of $30,000