For the year ended December 31, 2017 Savory Inc. (Savory) reported net income of $750,000. On December
Question:
For the year ended December 31, 2017 Savory Inc. (Savory) reported net income of $750,000. On December 31, 2016, Savory had the following capital stock outstanding:
Preferred shares, no par, $5 annual dividend, cumulative, authorized 50,000 shares and 50,000 shares outstanding $ 750,000 Common shares, no par, authorized 800,000 shares; issued and 400,000 shares outstanding 3,000,000
On May 31, 2017, Savory issued 40,000 common shares for $480,000 and on September 30, 2017 it issued 50,000 common shares for $750,000. On September 30, 2017, Savory declared and paid the dividend on the preferred shares. No common share dividends were paid in the year.
Required:
a. Calculate Savory's basic earnings per share for the year ended December 31, 2017.
b. How much of a dividend should Savory's shareholders expect to receive in 2018?
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
a Number of Shares Issued Weighted 12 Average Number Preferred Stock Common Stock Months of Common S...View the full answer
