A company had 70,000 shares of common stock outstanding throughout the year.Income before taxes and extraordinary items was $166,000.The tax rate was 40 percent.EPS for net income is:

Question

Quizplus · Accepted Answer

First, we need to calculate the net income by multiplying the income before taxes by (1 - tax rate):

Net income = $166,000 x (1 - 0.4) = $99,600

Then, we can calculate the earnings per share (EPS) by dividing the net income by the number of shares outstanding:

EPS = $99,600 / 70,000 = $1.42

Therefore, the answer is B) $1.42.

A Company Had 70,000 Shares of Common Stock Outstanding Throughout