Question

At December 31, 2008 and 2007, Glass Corp. had 180,000 shares of common stock and 10,000 shares of 5%, $100 par value cumulative preferred stock outstanding. No dividends were declared on either the preferred or common stock in 2008 or 2007. Net income for 2008 was $400,000. For 2008, earnings per common share amounted to:

Answer 1

The earnings per common share amounted to $1.94

Step-by-step explanation:

Net Income= $400,000

Preference Dividend = 10000*100*5%= 50000

Earnings for Common stock = 400,000 - 50000= $350000

Earning per common stock = 350000/180000

= 1.94

Therefore, The earnings per common share amounted to $1.94