The income statement for Dibble Company for the year ended December 31, 2014 appears below. *Includes $20,000 of interest expense and $22,000 of income tax expense.
Additional information:
1. Ordinary shares outstanding on January 1, 2014 were 40,000 shares. On July 1, 2014, 10,000 more shares were issued.
2. The market price of Dibble's shares was $12 at the end of 2014.
3. Cash dividends of $30,000 were paid, $6,000 of which were paid to preference shareholders.
Instructions
Compute the following ratios for 2014:
(a) earnings per share.
(b) price-earnings ratio.
(c) times interest earned.

Question

The income statement for Dibble Company for the year ended December 31, 2014 appears below.  *Includes $20,000 of interest expense and $22,000 of income tax expense.
Additional information:
1. Ordinary shares outstanding on January 1, 2014 were 40,000 shares. On July 1, 2014, 10,000 more shares were issued.
2. The market price of Dibble's shares was $12 at the end of 2014.
3. Cash dividends of $30,000 were paid, $6,000 of which were paid to preference shareholders.
Instructions
Compute the following ratios for 2014:
(a) earnings per share.
(b) price-earnings ratio.
(c) times interest earned.

Quizplus · Accepted Answer

The Answer of The income statement for Dibble Company for the year ended December 31, 2014 appears below.  *Includes $20,000 of interest expense and $22,000 of income tax expense.
Additional information:
1. Ordinary shares outstanding on January 1, 2014 were 40,000 shares. On July 1, 2014, 10,000 more shares were issued.
2. The market price of Dibble's shares was $12 at the end of 2014.
3. Cash dividends of $30,000 were paid, $6,000 of which were paid to preference shareholders.
Instructions
Compute the following ratios for 2014:
(a) earnings per share.
(b) price-earnings ratio.
(c) times interest earned.

The Income Statement for Dibble Company for the Year Ended