Refer to the Jeanette Company information in Cornerstone Exercise 16-18.

Required:

Round answers to two decimal places.

1. Compute the dollar amount of preferred dividends.

2. Compute the number of common shares.

3. Compute earnings per share for Jeanette Company.

Exercise 16-18

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Jeanette Company Income Statement For the Year Ended December 31, 2010 Amount Percent $ 8,281,989 (5,383,293) $ 2,898,696 (1,323,368) $ 1,575,328 (50,000) $ 1,525,328 (610,131) $ 915,197 Net sales 100.0% Less: Cost of goods sold Gross margin Less: Operating expenses Operating income Less: Interest expense 65.0 35.0 16.0 19.0 0.6 Net income before taxes 18.4 Less: Taxes (40%)* 7.4 Net income 11.0 * Includes both state and federal taxes. Jeanette Company Statement of Retained Earnings For the Year Ended December 31, 2010 $1,979,155 915,197 $2,894,352 Balance, beginning of period Net income Total Less: Preferred dividends (80,000) (201,887) $2,612,465 Dividends to common stockholders Balance, end of period