Question Content Area

Effect of Financing on Earnings per Share

Henriksen Co., which produces and sells biking equipment, is financed as follows:

Bonds payable, 10% (issued at face amount)	$1,700,000
Preferred $2 stock, $20 par	1,700,000
Common stock, $25 par	1,700,000

Income tax is estimated at 40% of income.

Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $561,000, (b) $731,000, and (c) $901,000.

Enter answers in dollars and cents, rounding to two decimal places.

a. Earnings per share on common stock $fill in the blank 1

b. Earnings per share on common stock $fill in the blank 2

c. Earnings per share on common stock $fill in the blank 3