A Company has 6000 ordinary shares outstanding.The preference shareholders received a $16,500 dividend.The net profit for the year is $290,000.Calculate earnings per share.

Question

Quizplus · Accepted Answer

First, we need to calculate the earnings available to ordinary shareholders by subtracting the preference dividend from the net profit:
$290,000 - $16,500 = $273,500

Then, we divide the earnings by the number of ordinary shares outstanding:
$273,500 / 6,000 = $45.58

Therefore, the earnings per share is $45.58.

Option B is the correct answer.

A Company Has 6000 Ordinary Shares Outstanding