Question

Coronado Industries had 309000 shares of common stock issued and outstanding at December 31, 2020. No common stock was issued during 2021. On January 1, 2021, Coronado issued 195000 shares of nonconvertible preferred stock. During 2021, Coronado declared and paid $92000 cash dividends on the common stock and $80000 on the preferred stock. Net income for the year ended December 31, 2021 was $621000. What should be Coronado's 2021 earnings per common share

Answer 1

Answer: $1.75

Step-by-step explanation:

Number of shares issued = 309000

Net income = $621,000

Cash dividend paid on preferred stock = $80000

Coronado's 2021 earnings per common share will then be:

= (Net income - Cash dividend) / Shares issued

= (621000 - 80000) / 309000

= 541000/309000

= $1.75