Question

The net income of Foster Furniture, Inc., amounted to $1,920,000 for the current year.
a. Compute the amount of earnings per share assuming that the shares of capital stock outstanding throughout the year consisted of:
1. 400,000 shares of $1 par value common stock and no preferred stock.
2. 100,000 shares of 8 percent, $100 par value preferred stock and 300,000 shares of $5 par value common stock.
b. Is the earnings per share figure computed in part a(2) considered to be basic or diluted? Explain.



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  • CreatedApril 17, 2014
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