Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 64

Calculate basic EPS Ringemup, Inc., had net income of $473,400 for its fiscal year ended October 31, 2010. During the year the company had outstanding 38,000 shares of $4.50, $50 par value preferred stock, and 105,000 shares of common stock.

Required:

Calculate the basic earnings per share of common stock for fiscal 2010.

Step 1 of 3

Calculate Basic Earnings per Share (EPS)

Basic EPS: A basic EPS refers to the rough estimation of a firm's profit amount that can be owed to one share of its common stock. Basic EPS do not part in the dilutive effects shared on convertible securities. Usually, basic EPS is computed as follows: