Mayan Company had net income of $132,000.The weighted-average common shares outstanding were 80,000.The company declared a $27,000 dividend on its noncumulative,nonparticipating preferred stock.There were no other stock transactions.The company's earnings per share is:
A)$1.65.
B)$1.99.
C)$1.31.
D)$0.34.
E)$4.89.

Question

Quizplus · Accepted Answer

First, we need to calculate the earnings available to common shareholders:
Net income - Preferred dividends = $132,000 - $27,000 = $105,000

Then, we can calculate earnings per share:
EPS = Earnings available to common shareholders / Weighted-average common shares outstanding
EPS = $105,000 / 80,000
EPS = $1.31

Therefore, the answer is C, $1.31.

Mayan Company Had Net Income of $132,000