Computing EPS: Simple Capital Structure

At the end of 2020, the records of Block Corporation reflected the following.

Common stock, $5 par, authorized 1,500,000 shares
Outstanding January 1, 2020, 1,200,000 shares		$6,000,000
Sold and issued April 1, 2020, 6,000 shares		30,000
Issued 5% stock dividend, September 30, 2020; 60,300 shares		301,500
Preferred stock, 6%, $10 par, nonconvertible, noncumulative, authorized 150,000 shares
Outstanding during year, 60,000 shares		600,000
Paid-in capital in excess of par, common stock		540,000
Paid-in capital in excess of par, preferred stock		300,000
Retained earnings (after the effects of current preferred dividends declared during 2020)		1,920,000
Bonds payable, 6.5%, nonconvertible, issued at par January 1, 2020		3,000,000
Net income		1,476,000
Income tax rate, 25%

a. What EPS presentation is requiredbasic, diluted, or both?

Answer: Basic EPS

b. Compute the required EPS amount(s).

• Note: Round earnings per share amount to two decimal places.

	Net Income Available to Common Stockholders	Weighted Avg. Common Shares Outstanding	Per Share
Answer: Basic EPS	Answer	Answer	Answer

c. Compute the required EPS amount(s), assuming that the preferred stock is cumulative.

• Note: Round earnings per share amount to two decimal places.

	Net Income Available to Common Stockholders	Weighted Avg. Common Shares Outstanding	Per Share
Answer: Basic EPS	Answer	Answer	Answer