Question

Concord Corporation had 302000 shares of common stock issued and outstanding at December 31, 2020. No common stock was issued during 2021. On January 1, 2021, Concord issued 201000 shares of nonconvertible preferred stock. During 2021, Concord declared and paid $100000 cash dividends on the common stock and $81000 on the preferred stock. Net income for the year ended December 31, 2021 was $611000. What should be Concord's 2021 earnings per common share

Answer 1

$1.05 per share

Step-by-step explanation:

Earnings per share is computed as

= (Net income reported - Preferred stock dividend) ÷ (Outstanding number of shares + additional shares issued)

= ($611,000 - $81,000) ÷ (302,000 + 201,000)

= $530,000 ÷ 503,000

= $1.05 per share.

Therefore, Concord's 2021 earnings per common share is $1.05 per share.