Question

Sheridan Corporation had 2020 net income of $798,000. During 2020, Sheridan paid a dividend of $2 per share on 33,200 shares of preferred stock. During 2020, Sheridan had outstanding 236,000 shares of common stock.

Required:
Compute Sheridan's 2020 earnings per share.

Answer 1

$3.10 per share

Step-by-step explanation:

Total preferred dividend = 33,200 shares * $2

Total preferred dividend = $66,400

Earning per share = (Net income - Preferred dividend) / Number of common stock outstanding

Earning per share = ($798,000 - $66,400) / 236,000 shares

Earning per share = $731,600 / 236,000 shares

Earning per share = $3.10 per share