Problem 1

Benn, Incorporated, has 6,000,000 shares of common stock outstanding on December 31, 2017. An additional 1,000,000 shares of common stock were issued on April 1, 2018, and 500,000 more on July 1, 2018. On October 1, 2018, Benn declared a 10% common stock dividend. On November 1, Benn purchased 120,000 of its own stock.

1. What was the number of shares to be used in computing basic earnings per share?
2. If net income is $9,500,000 and preferred dividends paid is $900,000, compute EPS to the nearest penny.

SHOW ALL COMPUTATIONS for a & b.