Question

Accounts payable $35,000 Cash provided by operations $90,000 Accounts receivable 37,500 Net income 36,000 Average common shares 20,000 Salaries and wages payable 8,000 Average current liabilities 110,000 Stockholders’ equity 240,000 Average and total assets 600,000 Total current assets 300,000 Average total liabilities 320,000 Total current liabilities 120,000 Cash 100,000 How much is earnings per share?

Answer 1

Answer:

The earnings per share is 1.8

Explanation:

The formula to compute the earning per share is shown below:

Earning per share = (Net income - preferred dividend) ÷ (weighted average common shares outstanding)

= $36,000 ÷ 20,000 shares

= 1.8 earning per share

The preferred dividend is not given in the question so we ignored it

The other items which are mentioned in the question are irrelevant. hence, it is ignored in the computation part.