Answer:
journal entry to update depreciation as of July 1, 2011
Depreciation Expense $16,000 (debit)
Accumulated Depreciation $16,000 (credit)
journal entry to record the sale of the equipment
Cash $66,000 (debit)
Accumulated Depreciation $128,000 (debit)
Equipment $180,000 (credit)
Profit and Loss $14,000 (credit)
Explanation:
If Hale Kennels uses the straight line method then the calculations will be as follows :
Annual Depreciation Charge = (Cost - Residual Value) ÷ Estimated Useful Life
= ($180,000 - $30,000) ÷ 5
= $32,000
Therefore,
Depreciation Charges for the period in use will be as follows :
2007 = $16,000 ($32,000 × 1/2)
2008 = $32,000
2009 = $32,000
2010 = $32,000
2011 = $16,000 ($32,000 × 1/2)
Total Accumulated depreciation = $128,000
Explaining journal entry to record the sale of the equipment
1. Derecognize the Cost of the Asset
2. Derecognize the Accumulated depreciation
3. Recognize the Cash Proceeds
4. Recognize the Profit or Loss arising from the sale
Under the modern traditional theory, the sovereign may nationalize foreign-owned property only where: a. it is for a public purpose. b. the foreign firm that owned the property was operating it unprofitably. c. a communist government takes over the country. d. the foreign firm has continuously violated the laws of the host country.
Answer: a. it is for a public purpose.
Explanation:
According to the Modern Traditional theory on compensation which deals with the seizure of foreign-owned property by the government of the nation in which the property is located, the sovereign authorities may nationalize foreign-owned property if it is deemed to be for public use.
If the government has shown that nationalization is for the good of the nation, the theory espouses that it is allowed. They would however have to provide adequate compensation to those whom the property was seized from.
A project begins in January 2014; it is to be completed in October 2016. The contract price is $3,900 and the estimated total cost of the project is $3,000. Additional data for the project is provided below:
2014 2015 2016
Costs Incurred To Date $300 $2,400 $4,200
Estimated cost to Complete 2,700 1,600
Estimated Total Cost $3,000 $4,000 $4,200
Percentage of completion [PC]= (Costs incurred to date)/(Estimated total cost)
Required:
Compute the gross profit/loss recognized for each year under the PC method.
Answer:
The Gross profit/loss recognized for each year under the PC method:
2014 2015 2016
Gross profit(loss) $90 $240 ($630)
Explanation:
a) Data and Calculations:
Project's contract price = $3,900
Estimated total cost of the project = $3,000
2014 2015 2016
Costs Incurred To Date $300 $2,400 $4,200
Estimated cost to Complete 2,700 1,600 0
Estimated Total Cost $3,000 $4,000 $4,200
Percentage of completion [PC]= (Costs incurred to date)/(Estimated total cost)
2014 2015 2016
Percentage of completion: $300/$3,000 $2,400/$4,000
Percentage of completion: 10% 60% 30% (100 - 70)
Revenue Allocation: 2014 2015 2016 Total
2014 $390 (10% of $3,900) $390 $390
2015 $2,340 (60% of $3,900) $2,340 $2,340
2016 $1,170 (30% of $3,900) $1,170 $1,170
Total Revenue $3,900
Actual costs incurred ($300) ($2,100) ($1,800) ($4,200)
Gross profit $90 $240 ($630) ($300)
A store uses the newsvendor model to manage its inventory. Demand for its product is normally distributed with a mean of 500 and a standard deviation of 300. Store A purchases the product for $10 each unit and sells each for $25. Inventory is salvaged for $5. What is the optimal quantity the store should order of its product
Answer:
702.20
Explanation:
Optimal order quantity Q = D+ z σ
Where D is the average demand = 500 units
And σ is the standard deviation of demand = 300
Cu = Cost of stock-out (underestimation) = Selling price – unit cost = $25 -$10 = $15
Co = Cost of excess inventory (overestimation) = Unit cost – Salvage Value = $10 – $5 = $5
Therefore Service level = Cu / (Cu + Co)
= $15/ ($15 + $5)
= 0.75 or 75%
For service level 75% the Z value = 0.674
Therefore, Q = 500+0.674*300 = 702.20
A-One Auto Sales, Inc., employs Best Collection Company as a collection agent. While repossessing goods from Carl, one of A-One's customers, Best causes an accident in which Carl is injured. Carl can recover from
Answer: c. A-One or Best.
Explanation:
Best Collection Company are the ones who cause the accident and so they can be held liable and have to compensate Carl for injuries and harm caused.
Best however, was acting as an agent on behalf of A-One Auto Sales so A-One can be held liable as well for the incident. Carl can therefore also be compensated by A-One as well.
Carl cannot be compensated by both for the same incident as this amounts to double compensation but can be compensated by either one of them.
During the year, Eastern Gas Pipeline Co. issued 5,000 shares of preferred stock for $25 per share. This transaction is classified as .
Answer: B. Financing cash flow
Explanation:
Financing cashflow activities are those that have to do with the capital raised for the operations of the business. Every cash transaction related to capital falls under Financing activities.
This includes transactions such as issuing shares such as the preferred shares in the question and debt instruments such as bonds. Dividends and treasury purchases also fall under here.
Lenore, a single California taxpayer, has taxable income before capital gains of $78,000 and a long-term capital gain of $5,000 on the sale of RSS stock. What is the total amount of California state tax Lenore will pay on the capital gain
Answer:
As we all know Long term capital gain is always taxed at 15% as per the federal taxation but in California the taxation is bit different the long term capital gain is not taxed separately it is included in the income and it is considered as Ordinary income and is taxed at regular individual tax rates. So, Tax that Lenore as to pay as per the Federal Taxation is 15% of $5,000 = $750. But Tax that Lenore gas to pay as per the California Taxation is 9.3% of $ 5,000 = $465, which is treated as a tax paid on ordinary income.
On January 1, 2021, Gundy Enterprises purchases an office building for $338,000, paying $58,000 down and borrowing the remaining $280,000, signing a 9%, 10-year mortgage. Installment payments of $3,546.92 are due at the end of each month, with the first payment due on January 31, 2021.
Required:
Record the purchase of the building on January 1, 2021.
Answer:
Debit Building $338,000
Credit Cash $58,000
Credit Notes Payable $280,000
Explanation:
Preparation of the journal entry to Record the purchase of the building on January 1, 2021.
Based on the information given we were told that the company purchases an office building for the amount of $338,000 which means that if they paid $58,000 down and as well borrowed the remaining amount of $280,000 the journal entry to Record the purchase of the building on January 1, 2021 will be :
Debit Building $338,000
Credit Cash $58,000
Credit Notes Payable $280,000
(Being to record the purchase of building)
In choosing between the range of alternative investments typically available to U.S. households, which of the following will play a role in influencing their selection of a particular investment type?
a. the expected rate of return, risk, and liquidity of each kind of investment
b. the interest rate and the expected rate of return
c. whether or not the majority of households are early stage investors
d. the form of dividends, angel investors, future expectations
Answer: B. the interest rate and the expected rate of return
Explanation:
What most firms and Industries look out for when going into a business is the interest rate and the expected return on investment. This is a guide for anyone carrying out a study on any business. If these are not considered it'll be assumed the firm is running a charity organization and would run at a loss sooner or later. What will influence the decision of any investment is the interest rate and the expected rate of return
The constraint at Rauchwerger Corporation is time on a particular machine. The company makes three products that use this machine. Date concerning those products appear below.
WX KD FS
Selling price per unit $335.20 $228.48 $199.23
Variable cost per unit $259.22 $173.04 $159.57
Minutes on the constraint 7.70 4.50 5.70
Assume that sufficient time is available on the constrained machine to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource? Round intermediate calculations to 2 decimal places.
a. $75.98 per minute
b. $6.96 per minute
c. $39.66 per minute
d. $12.32 per minute
Answer:
the least profitable is $39.66 per unit or 9.72 per minute
Explanation:
The computation is shown below:
The Price Per Unit for WX is
= $355.20 - $259.22
= $95.98
Price Per Unit for KD is
= $228.48 - $173.04
= $55.44
And, the Price Per Unit for FS is
= $199.23 - $159.57
= $39.66
Now
Price per Minute for WX is
= $95.98 ÷ 7.70
= 12.46
Price Per Minute for KD is
= $55.44 ÷ 4.50
= 12.32
And, Price Per Minute for FS is
= $55.44 ÷ 5.70
= 9.72
So here the least profitable is $39.66 per unit or 9.72 per minute
This is the answer but the same is not provided
Premium priced products like those offered by Louis Vuitton are not likely to be distributed _______.
Answer:
b. intensively
Explanation:
Louis Vuitton products mostly deal with the suitcases, shoes, watches, jewelleries, sunglasses, etc. Their products would be sold via departments i.e. rental, online websites, stores, etc
So as per the given situation, their premium and pricing products could not be allocated intensively as for many people it cant be afforded due to the high prices.
So the correct option is b.
A real estate agent would like to predict the selling price of a single-family house by predicting the price (in thousands of dollars) based on the square footage (in 100 square feet). Predict the price of a 3000 square foot house (in thousands of dollars).
Answer: 134.7088 (thousands of dollars)
Explanation:
This can be solved with a regression equation based on the details in the question.
y being the price of the house.
x as the independent variable is given as 3.8785
c as the intercept is given as 18.3538
The equation s;
y = 3.8785x + 18.3538
x will be 30 because the variables are based on 100 square feet so, 3,000/100 = 30
y = 3.8785 *(30) + 18.3538
= $134.7088 (thousands of dollars)
= $134,708.80
Collin and Scott are co-founders of the Russian River Brewing Company. Which three tools and methods are the co-founders not likely to adopt to promote the brewery's operational excellence and further the cause of good strategy execution
Answer:
strategic resource training, standard industry techniques, and competitor strength matrix techniques
Explanation:
The three tools and techniques that co-founders not likely to adopt for promoting the operational excellence is training of strategic resource, techniques of standard industry and the third one is techniques of competitor strength max
As these three tools and methods would not help the company for promoting the same
Therefore the first option is correct
Barbara's employer offers health coverage to its employees. However, Barbara feels it is unaffordable and wants to apply for a health insurance premium tax credit. In order for the coverage to be deemed unaffordable in 2020, Barbara's self-only premium must exceed ___% of her household income.
Answer:
9.83%
Explanation:
If the health insurance premium represents 9.83% of Barbara's income or less, it is considered affordable coverage. Only if it exceeds the 9.83% threshold, will Barbara be able to request a health insurance premium tax credit. Theoretically, if Barbara's health insurance was purchased in the Health Insurance Marketplace, the tax credit should be automatic and her premium should be lowered so that it can become affordable.
A large human population, both globally and within individual countries, has been a concern since the time of Thomas Malthus. Country X is 95% desert. The government of Country X is concerned about not having enough arable land (land capable of being used to grow crops) in the country to produce the food needed to feed its population without increasing food imports. One government official proposes a project to irrigate large areas of the desert to convert these areas of desert to agricultural fields.
Required:
Describe one potential benefit of this proposed project.
Answer:
The most obvious potential benefit is turning desert land into arable land. As total arable land increases, the country will be able to grow more crops. As more crops are grown and harvested, the country will be able to feed larger populations without having to import large amounts of food. E.g. in many Arab nations, food and water are scarce and they are forced to import most of their food. If they didn't have oil exports, they wouldn't be able to pay for these imports.
A firm has market power if it can a. maximize profits. b. minimize costs. c. influence the market price of the good it sells. d. hire as many workers as it needs at the prevailing wage rate.
Answer:
Option C: Influence the market price of the good as it sells
Explanation:
Market Power is simply when a firm is able to raise price above the equilibrium level by not and without losing all of its customers. It depends on largely on the closeness of substiutes.
A firm has market power if it can Influence the market price of the good as it sells to its customer and can regulate it when necessary.
Abbott Landscaping purchased a tractor at a cost of $29,000 and sold it three years later for $15,700. Abbott recorded depreciation using the straight-line method, a five-year service life, and a $4,000 residual value. Tractors are included in the Equipment account.
Required:
Record the sale of equipment.
Answer:
Cash 15700 Dr
Accumulated depreciation 15000 Dr
Equipment - Tractor 29000 Cr
Gain on sale - Equipment 1700 Cr
Explanation:
The straight line method of depreciation charges a constant depreciation expense per year throughout the useful life of the asset. The formula for depreciation expense under this method is,
Depreciation expense = (Cost - Residual value) / Estimated useful life of the asset
Depreciation expense per year = (29000 - 4000) / 5 = $5000 per year
As the asset was sold after three years, the accumulated depreciation on the asset would be = 5000 * 3 = $15000
The NBV or carrying value of the asset will be = 29000 - 15000 = 14000
The gain on sale of equipment will be = 15700 - 14000 = $1700
X Corporation and its two divisions, Domestic and Foreign, appear below:
Sales revenues, Domestic $640,000
Variable expenses, Domestic $371,300
Traceable fixed expenses, Domestic $76,500
Sales revenues, Foreign $493,900
Variable expenses, Foreign $281,800
Traceable fixed expenses, Foreign $63,900
In addition, X's common fixed expenses totaled $173,300 and were allocated as follows: $90,000 to the Domestic division and $83,300 to the Foreign division.
What is the segment margin for the Domestic division?
a. $178,700
b. $371,300
c. $102,200
d. $192,200
Answer: $192,200
Explanation:
Based on the information that have been provided in the question, the segment margin for the domestic division will be calculated as:
Segment Margin = Segment Sales Revenue - Segment Variable Expenses - The Traceable Fixed Cost
= $640,000 - $371,300 - $76,500
= $192,200
The Treasury bill rate is 3.5%, and the expected return on the market portfolio is 10.4%. Use the capital asset pricing model. a. What is the risk premium on the market?
Answer:
6.9%
Explanation:
Treasury bill rate is 3.5%
Market portfolio is 10.4%
Therefore the risk premium on the market can be calculated as follows
= 10.4%-3.5%
= 6.9%
Hence the risk premium is 6.9%
Suppose Alex and Becky are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Alex chooses Right and Becky chooses Right, Alex will receive a payoff of 5 and Becky will receive a payoff of 5.
Becky
Left Right
Alex Left 6, 6 6, 3
Right 4, 3 5, 5
The only dominant strategy in this game is for___ to choose_____ .
The outcome reflecting the unique Nash equilibrium in this game is as follows:
Alex chooses______ and Becky chooses_______ .
Answer:
The only dominant strategy in this game is for__Alex_ to choose__Right___ .
The outcome reflecting the unique Nash equilibrium in this game is as follows:
Alex chooses__Right____ and Becky chooses__Left_____ .
Explanation:
The game theory of the Nash equilibrium achieves the optimal outcome of a game because Alex and Becky are not incentivized to deviate from their chosen strategies after considering the opponent's choice. Neither of these two players can increase their payoff by choosing an action different from their current strategic action. Thus, this action profile achieves a Nash equilibrium for the two players because there exists randomization in the game.
Claire Corporation is planning to issue bonds with a face value of $240,000 and a coupon rate of 8 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Claire uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 12 percent.
Required:
a. Provide the journal entry to record the issuance of the bonds.
b. Provide the journal entry to record the interest payment on March 31, June 30, September 30, and December 31 of this year.
c. What bonds payable amount will Claire report on this year’s December 31 balance sheet?
Answer:
a) issue price
PV of face value = $240,000 / (1 + 3%)⁸ = $189,458
PV of coupon payments = $4,800 x 7.0197 (PV annuity factor, 3%, 8 periods) = $33,695
market price = $223,153
January 1, bonds issued at a discount
Dr Cash 223,153
Dr Discount on bonds payable 16,847
Cr Bonds payable 240,000
b) discount amortization = ($223,153 x 3%) - $4,800 = $1,895
discount amortization = ($225,048 x 3%) - $4,800 = $1,951
discount amortization = ($226,999 x 3%) - $4,800 = $2,010
discount amortization = ($229,009 x 3%) - $4,800 = $2,070
March 31, first coupon payment
Dr Interest expense 6,695
Cr Cash 4,800
Cr Discount on bonds payable 1,895
June 30, second coupon payment
Dr Interest expense 6,751
Cr Cash 4,800
Cr Discount on bonds payable 1,951
September 30, third coupon payment
Dr Interest expense 6,810
Cr Cash 4,800
Cr Discount on bonds payable 2,010
December 31, fourth coupon payment
Dr Interest expense 6,870
Cr Cash 4,800
Cr Discount on bonds payable 2,070
c) bonds' carrying value at December 31 = $231,169
Suppose that the market for painting services is perfectly competitive. Painting companies are identical; their long-run cost functions are given by: Market demand is: The long-run equilibrium price in this industry is $____. 173.5 162.5 194.5 155.5
Answer:
b. 162.5
Explanation:
Missing question "long-run cost functions are given by TC(Q)= 6Q^3-30Q^2+200Q"
TC(Q)= 6Q^3-30Q^2+200Q"
Marginal cost = 18Q^2 - 60Q + 200
Average Total Cost = 6Q^2 - 30Q + 200
ЭATC / ЭQ = 0
12Q - 30 = 0
Q = 2.5
ATC = 6Q^2 - 30Q + 200
ATC = 6*(2.5)^2 - 30(2.5) + 200
ATC = 37.5 - 75 + 200
ATC = 162.5
Thus, P = 162.5
Koovuq131 is a division of a large corporation. Data concerning the most recent period appears below:
Sales $18,120,000
Net operating income $1,177,800
Average operating assets $4,450,000
What is Koovuq131's margin (closest to)?
Answer:
0.065
Explanation:
Koovuq131 has sales of $18,120,000
The net operating income is $1,177,800
The average operating assets is $4,450,000
Therefore the margin can be calculated as follows
= Net operating income/sales
= 1,177,800/18,120,000
= 0.065
Hence the margin is closest to 0.065
Melinda signs a three year contract for employment as a legal studies lecturer. Does this type of contract fall within the scope of the statute of frauds
Answer: Yes, because it is a contract whose terms prevent possible performance within one year
Explanation:
The Statute of Fraud mandates that certain contracts need to be written down. These contracts include the sale of land, amounts involving more than $500 and contracts that have a timeframe of over a year.
Melinda entered into a contract with terms that have to be fulfilled in more than a year. It is therefore under the Statute of Frauds.
Assume that interest rate parity holds and that 90-day risk-free securities yield a nominal annual rate of 3% in the United States and a nominal annual rate of 3.5% in the United Kingdom. In the spot market, 1 pound 5 $1.29. a. What is the 90-day forward rate
Answer:
$1.55
Explanation:
Interest rate parity = (1+Rh) / (1+Rf) = F1 / S0
Rh = rate on home currency here US is home 3% p.a = 3%/4 = 0.75%
Rf= rate on foreign currency here Germany 3.5% p.a = 3.5%/4 = 0.875
F1 = Forward rate , S0= Spot market rate
So, (1+0.0075) / (1+0.00875) = F1 / 1.56
1.0075/1.00875 = F1 / 1.56
0.998761 = F1 / 1.56
F1 = 0.998761 * 1.56
F1 = 1.55806716
F1 = $1.55
Thus, the 90-day forward rate is $1.55
Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,500. If the issuing corporation redeems the bonds at 98 1/2, what is the amount of gain or loss on redemption
Answer:
Loss on Redemption = $500
Explanation:
Gain or Loss on redemption:
Par value of Bonds $1,000,000
Less: Discount on bonds $15,500
Book Value of Bonds $984,500
Less: Redemption value $985,000 ($1,000,000 * 98.50%)
Loss on Redemption $500
A young college student was making a purchase at her local department store. The clerk suggested that she would get an additional 15% off the purchase price if she would sign up for a store credit card. Which of the following statements discusses how a personal finance expert might view this incentive?
a. Reports indicate that students are particularly vulnerable to these tactics. If you fail to pay off the balance, you end up paying much more than the original purchase price for your items.
b. An expert would advise you that the more credit cards you hold, the better your credit rating will be with the three major credit rating companies. Actuaries average the opinions of each credit card company to determine your score.
c. A personal finance expert would encourage her to take the incentive, particularly if interest rates on the card remain below 20%.
d. A personal finance expert would advise a college student to always take this incentive seriously because it is like trade credit for businesses
Answer: a. Reports indicate that students are particularly vulnerable to these tactics. If you fail to pay off the balance, you end up paying much more than the original purchase price for your items.
Explanation:
Even though financial advice is usually tailormade for the individual, a financial expert would most likely give this advice to a student because students are indeed vulnerable to such tactics.
They would be more prone to spend more in the store as a result of the credit card and this will lead to them being unable to pay off balances which will then lead to them paying much more than the original price they would have paid.
Shelby Cabinets, Inc. produces custom cabinets. The following inventory balances appeared on its balance sheet.
12/31/2012
12/31/2011
Raw materials inventory
$ 8,000
$ 10,000
Work-in-process inventory
600,000
550,000
Finished goods inventory
350,000
410,000
Shelby Cabinets had $1,265,000 in sales for the year ended December 31, 2012. The company also had the following costs for the year:
Selling
$ 90,000
General and administrative
$240,000
Raw materials purchases
$100,000
Direct labor used in production
$125,000
Manufacturing overhead
$630,000
Of the total raw materials placed in production for the year, $12,000 was for indirect materials and must be deducted to find direct materials placed in production.
Using the above information, what was Shelby’s Cost of Goods Manufactured?
(Hint: You must first calculate Direct materials placed in production before calculating the Cost of Goods Manufactured.)
Group of answer choices
$795,000
$845,000
$855,000
$1,395,000
Answer:
$855,000 yippie!!!
20192018201720162015 Sales$656,856$432,142$358,624$243,135$180,100 Cost of goods sold 337,397 222,192 186,298 125,649 91,851 Accounts receivable 31,726 25,194 24,602 14,199 12,355 Compute trend percents for the above accounts, using 2015 as the base year.\
Answer:
Trend Percent for Net Sales :
2016 = 135.00 %
2017 =199.00%
2018 = 239.9 %
2019 = 364.7 %
Trend Percent for Cost of goods sold :
2016 = 136.7 %
2017 = 202.8 %
2018 = 241.9 %
2019 = 367.33 %
Trend Percent for Accounts receivable :
2016 = 114.9 %
2017 = 199.00 %
2018 = 203.9 %
2019 = 256.7 %
Explanation:
2019 2018 2017 2016 2015
Sales $656,856 $432,142 $358,624 $243,135 $180,100
Cost of goods sold 337,397 222,192 186,298 125,649 91,851 Accounts receivable 31,726 25,194 24,602 14,199 12,355
Trend Percent for Net Sales :
2016 Current Year Sales/ Base year Sales = $243,135 /$180,100
= 135.00 %
2017 Current Year Sales/ Base year Sales = $358,624 /$180,100 = 199.00%
2018 Current Year Sales/ Base year Sales =$432,142 / $180,100
= 239.9 %
2019 Current Year Sales/ Base year Sales = $656,856 /$180,100
= 364.7 %
Trend Percent for Cost of goods sold :
2016 Current Year CGS/ Base year CGS = $125,649 /91,851 = 136.7 %
2017 Current Year CGS/ Base year CGS = $ 186,298 /91,851 = 202.8 %
2018 Current Year CGS/ Base year CGS =$ 222,192/ 91,851 = 241.9 %
2019 Current Year CGS/ Base year CGS= $337,397 /91,851 = 367.33 %
Trend Percent for Accounts receivable :
2016 Current Year A/R/ Base year A/R = $14,199 /12,355 = 114.9 %
2017 Current Year A/R/ Base year A/R= $ 24,602 /12,355= 199.00 %
2018 Current Year A/R/ Base year A/R=$ 25,194 / 12,355 = 203.9 %
2019 Current Year A/R/ Base year A/R = $31,726 /12,355 = 256.7 %
Barbara is a single taxpayer who had a 2020 adjusted gross income of $25,000 and contributed $4,000 to her traditional IRA. Assuming she has a $2,000 income tax liability for the year, what is her maximum retirement contribution savings credit
Answer:
$200
Explanation:
The retirement contribution savings credit is designed to benefit low and middle income tax payers that contribute to retirement accounts.
The maximum credit ranges from $200 to $1,000 per taxpayer.
Since Barbara earned below $32,500, she applies for this tax credit.
Since her AGI is over $21,251, she can only deduct 10% of the first $2,000 contributed to her IRA account = $2,000 x 10% = $200
In 2020, Cullumber Company reported net income of $585000. It declared and paid preferred stock dividends of $111000 and common stock dividends of $54000. During 2020, Cullumber had a weighted average of 300000 common shares outstanding. Compute Cullumber's 2020 earnings per share.
Answer: $1.58
Explanation:
Earnings per share is the amount of a company's earnings that is available to the common shareholders.
Formula is;
Earnings per share = (Net Income - Preferred dividends) / Weighted average common share outstanding
= (585,000 - 111,000) / 300,000
= $1.58