On January 1, 2016, Laura Corporation had 18,000 shares of common stock outstanding, and reacquired 2,000 shares on July 1. The company earned net income of $110,800 and paid a cash dividend on its preferred stock of $36,000. What was the basic earnings per share for the year?

Question

Quizplus · Accepted Answer

Basic earnings per share = Net income / Weighted average number of shares outstanding= $110,800 / (18,000 + (2,000 * 6/12))= $110,800 / 19,000= $5.83

On January 1, 2016, Laura Corporation Had 18,000 Shares of Common