Asked Jan 24, 2020

Computing earnings per share

HEB Corporation had net income for 2018 of $60,450. HEB had 15,500 shares of common stock outstanding at the beginning of the year and 20,100 shares of common stock outstanding as of December 31, 2018. During the year, HEB declared and paid preferred dividends of $2,600. Compute HEB’s earnings per share.


Expert Answer

Step 1

Earnings per share:


Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders.

Step 2

Calculate the earnings per share:

Accounting homework question answer, step 2, image 1
Step 3

Working Note (1):

Accounting homework question answer, step 3, image 1

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