Use the ASC Codification Reference:

Metro Corporation is preparing their financial statements for the year ending September 30, 2022 (Fiscal 2022). Metro Corporation has two categories of stock: Preferred and Common. On September 27, 2022 Metro Corporation declared dividends on the preferred stock which will be paid on October 18, 2022. In order to calculate EPS, the staff accountant had the following information:

Fiscal 2022 Net Income: $3,620,000

Preferred Dividends Declared on September 27, 2022 $ 500,000

but not paid until October 18, 2022

Weighted Average Number of Common Shares Outstanding 1,200,000 shares

The staff accountant has determined that since the preferred dividends were not paid prior to September 30, 2022 the preferred dividend should not be included in the 2022 EPS.

Accounting Issue: In the calculation for EPS should Metro Corporation include the preferred dividends not paid prior to September 30, 2022?

Your Interpretation of the Guidance: Should Metro Corporation include the preferred dividends in the calculation of EPS for the year ending September 30, 2022?

a. Yes, include the preferred dividends in the calculation of EPS

b. No, do not include the preferred dividends in the calculation of EPS.

Calculate EPS (when inputting your response into D2L do not use dollar signs or commas but use decimals rounded to the second decimal place. For example, input 1.00 not 1)