Question: Earnings Per Share Financial statement data for the years ended December 31 for Cottontop Corporation follow: 20Y3 20Y2 Net income $1,025,000 $862,500 Preferred dividends $156,000

Earnings Per Share

Financial statement data for the years ended December 31 for Cottontop Corporation follow:

20Y3 20Y2
Net income $1,025,000 $862,500
Preferred dividends $156,000 $156,000
Average number of common shares outstanding 55,000 shares 45,000 shares

a. Determine the earnings per share for 20Y3 and 20Y2. Round your answers to two decimal places.

20Y3 $fill in the blank 1 per share
20Y2 $fill in the blank 2 per share

b. Does the change in the earnings per share from 20Y2 to 20Y3 indicate a favorable or unfavorable trend?

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