The income statement for Dibble Company for the year ended December 31, 2010 appears below.
*Includes $20,000 of interest expense and $22,000 of income tax expense.
Additional information:
1. Common stock outstanding on January 1, 2010 was 50,000 shares. On July 1, 2010, 10,000 more shares were issued.
2. The market price of Dibble's stock was $12 at the end of 2010.
3. Cash dividends of $30,000 were paid, $6,000 of which were paid to preferred stockholders.
Instructions
Compute the following ratios for 2010:
(a) earnings per share.
(b) price-earnings.
(c) times interest earned.

Question

The income statement for Dibble Company for the year ended December 31, 2010 appears below.  
*Includes $20,000 of interest expense and $22,000 of income tax expense.
Additional information:
1. Common stock outstanding on January 1, 2010 was 50,000 shares. On July 1, 2010, 10,000 more shares were issued.
2. The market price of Dibble's stock was $12 at the end of 2010.
3. Cash dividends of $30,000 were paid, $6,000 of which were paid to preferred stockholders.
Instructions
Compute the following ratios for 2010:
(a) earnings per share.
(b) price-earnings.
(c) times interest earned.

Quizplus · Accepted Answer

The Answer of The income statement for Dibble Company for the year ended December 31, 2010 appears below.  
*Includes $20,000 of interest expense and $22,000 of income tax expense.
Additional information:
1. Common stock outstanding on January 1, 2010 was 50,000 shares. On July 1, 2010, 10,000 more shares were issued.
2. The market price of Dibble's stock was $12 at the end of 2010.
3. Cash dividends of $30,000 were paid, $6,000 of which were paid to preferred stockholders.
Instructions
Compute the following ratios for 2010:
(a) earnings per share.
(b) price-earnings.
(c) times interest earned.

The Income Statement for Dibble Company for the Year Ended