The abel company provided the following information from its financial records: net income $ 250,000 common shares outstanding 1/1 200,000 common stock dividends $ 20,000 common shares outstanding 12/31 300,000 preferred stock dividends $ 25,000 preferred shares outstanding 1/1 10,000 sales $ 1,000,000 preferred shares outstanding 12/31 6,000 what is the amount of the company's earnings per share?

The amount of the company's earnings per share is $0.90 per share.

Explanation:

The formula to compute earning per share is shown below:

= (Net income - preferred stock dividend) ÷ Average number of common shares outstanding

where,

average number of common shares outstanding is equals to

= (Opening balance + ending balance) ÷ 2

= (200,000 + 300,000) ÷ 2 = 250,000  shares

Now, put the values in the above formula which is equals to

= ($250,000 - $25,000) ÷ 250,000 shares

= $0.90 per share

Hence, the amount of the company's earnings per share is $0.90 per share.

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