Acc101 Financial Accounting: E12-5 The net income of Foster Furniture, Inc
Acc101 Financial Accounting
Exercise 12-5: The net income of Foster Furniture, Inc., amounted to $1,920,000 for the current year.
Instructions: a. Compute the amount of earnings per share assuming that the shares of capital stock outstanding throughout the year consisted of: 1. 400,000 shares of $1 par value common stock and no preferred stock. 2. 100,000 shares of 8 percent, $100 par value preferred stock and 300,000 shares of $5 par value common stock. b. Is the earnings per share figure computed in part a(2) considered to be basic or diluted? Explain.