Question

Norton Corporation reports the following information: Net income $800,000 Dividends on common stock $200,000 Dividends on preferred stock $100,000 Weighted average common shares outstanding 200,000 Norton should report earnings per share of

Answer 1

$3.5

Step-by-step explanation:

As per the situation the computation of earnings per share is shown below:-

Earnings per share = (Net income - Preferred dividends) ÷ Weighted average common shares outstanding

= ($800,000 - $100,000) ÷ 200,000

= $700,000 ÷ 200,000

= $3.5

Therefore for determining the earnings per shares we simply applied the above formula.