Abel Company provided the following information from its financial records:

What is the amount of the company's earnings per share?
A)$0.82
B)$1.00
C)$0.90
D)$0.75

Question

Abel Company provided the following information from its financial records:

What is the amount of the company's earnings per share?
A)$0.82 
B)$1.00 
C)$0.90 
D)$0.75

Quizplus · Accepted Answer

Earnings per share = (Net income - Preferred stock dividends)÷ Average shares outstanding
Earnings per share = (Net income - Preferred stock dividends)÷ [(Beginning shares outstanding + ending shares outstanding)÷ 2]
Earnings per share = ($250,000 - $25,000)÷ [(200,000 shares outstanding + 300,000 shares outstanding)÷ 2] = $225,000 ÷ 250,000 shares = $0.90 per share

Abel Company Provided the Following Information from Its Financial Records