Monroe Company reported the following information for the year ended December 31, 2010: $\begin{array}{ll}
\text { Net income } & \$ 600,000 \
\text { Preferred dividends declared and paid } & 60,000 \
\text { Common dividends declared and paid } & 80,000 \
\text { Average common shares outstanding } & 90,000 \
\text { Ending market price per share } & 40 \
\text { Net sales } & 4,100,000
\end{array}$ Monroe's earnings per share for 2010 was
A)$6.67
B)$6.00
C)$5.11
D)$0.15

Question

Quizplus · Accepted Answer

Earnings per share (EPS) is calculated as (Net Income - Preferred Dividends) / Average Common Shares Outstanding. Therefore, EPS = ($600,000 - $60,000) / 90,000 = $540,000 / 90,000 = $6.00.

Monroe Company Reported the Following Information for the Year Ended