A firm has the following accounts and financial data for 2014: The firm's earnings available to common shareholders for 2014 is ________.
A) -$224.25
B) $195.40
C) $302.40
D) $516.60

Question

A firm has the following accounts and financial data for 2014:  The firm's earnings available to common shareholders for 2014 is ________.
A) -$224.25 
B) $195.40 
C) $302.40 
D) $516.60

Quizplus · Accepted Answer

To find the earnings available to common shareholders, we need to subtract dividends paid to preferred stockholders from net income. 
Net Income = $1,333.80 
Preferred dividends = $452.40 
Earnings available to common shareholders = Net Income - Preferred dividends = $1,333.80 - $452.40 = $881.40 
Therefore, the correct answer is C) $302.40.

A Firm Has the Following Accounts and Financial Data for 2014