Junkyard Arts, Inc., had earnings of $316,000 for 2016. The company had 40,000 shares of common stock

Question:

Junkyard Arts, Inc., had earnings of $316,000 for 2016. The company had 40,000 shares of common stock outstanding during the year. In addition, the company issued 15,000 shares of $50 par value preferred stock on January 9, 2016. The preferred stock has a dividend of $1.60 per share. There were no transactions in either common or preferred stock during 2016.

Determine the basic earnings per share for Junkyard Arts?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...