On December 31, 2019, Americana Inc. had 175,000 shares of common stock issued and outstanding. Americana Inc.
Question:
On December 31, 2019, Americana Inc. had 175,000 shares of common stock issued and outstanding. Americana Inc. issued a 40% stock dividend on July 1, 2020. On October 1, 2020, the company purchased 20,000 shares of its common stock for the treasury, and declared a 2-for-1 stock split on December 31, 2020. American also had 10,000 shares of 5%, $20 par value cumulative preferred stock outstanding. No dividends were declared on either the preferred or the common stock in 2019 or 2020. Net income for 2020 was $1,000,000.
Required
a. Compute the required EPS amount.
| Net Income Available to Common Stockholders | Weighted Avg. Common Shares Outstanding | Per Share | |
|---|---|---|---|
| Basic EPS | 4,970,000 |
b. Compute the required EPS amount assuming instead that Americana Inc. declared and paid the current year preferred dividend and one year of dividends in arrears in December 2020.
| Net Income Available to Common Stockholders | Weighted Avg. Common Shares Outstanding | Per Share | |
|---|---|---|---|
| Basic EPS |
c. Compute the required EPS amount assuming instead that the preferred stock is noncumulative.
| Net Income Available to Common Stockholders | Weighted Avg. Common Shares Outstanding | Per Share | |
|---|---|---|---|
| Basic EPS |
Expert Answer:
Part A Net Income Available to Common Stockholders Divided by Weighted Avg Common Shares Outstanding ... View the full answer
