Net income for a corporation for the current year amounts to $100,000.The corporation currently has outstanding 8,000 shares of $2,cumulative preferred shares and 20,000 common shares.The denominator to be used in the earnings per share calculation is:

Question

Quizplus · Accepted Answer

The denominator for earnings per share (EPS) calculation is the number of common shares outstanding, which is 20,000 in this case. Preferred shares are not included in the EPS denominator.

Net Income for a Corporation for the Current Year Amounts