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QUESTION 7 A companys Dec 31, 2015 equity accounts are shown below: Preferred Stock (7%, $100 par, cumulative, 8,000 authorized) $ 400,000 Common Stock ($10

QUESTION 7

  1. A companys Dec 31, 2015 equity accounts are shown below:

    Preferred Stock (7%, $100 par, cumulative, 8,000 authorized) $ 400,000

    Common Stock ($10 par, 200,000 shares authorized) 1,000,000

    On April 1, 2015, 25,000 shares of common stock had been issued when the market price of the stock was $15. On August 31, 2015, 30,000 shares of common stock had been issued in exchange for some land when the stock was trading at $18 per share. No new shares of preferred stock were issued during the year. If the company reported net income of $200,000 in 2015, what are the earnings per share? (Round to the nearest cent.)

    A.

    $2.33

    B.

    $2.00

    C.

    $2.71

    D.

    $1.92

    E.

    $1.72

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