Getaway Travel Company reported net income for 2018 in the amount of $50,000. During 2018, Getaway declared and paid $2,000 in cash dividends on its nonconvertible preferred stock. Getaway also paid $10,000 cash dividends on its common stock. Getaway had 40,000 common shares outstanding from January 1 until 10,000 new shares were sold for cash on July 1, 2018. A 2-for-1 stock split was granted on July 5, 2018. What is the 2018 basic earnings per share (rounded)?
A) $.42.
B) $.47.
C) $.53.
D) $.56.

Question

Quizplus · Accepted Answer

$\frac{\$ 50,000-2,000}{(40,000 \times 2)+(10,000 \times 6 / 12 \times 2)}=\frac{\$ 48,000}{90,000}=\$ 0.53$

Getaway Travel Company Reported Net Income for 2018 in the Amount