# James Corporation earned net income of $90,000 this year. The company began the year with 600 shares of common stock and issued 500 more on April 1. They issued$5,000 in preferred dividends for the year. What is the EPS for the year for James (rounded to the nearest dollar)?

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 14, Problem 21EA
Textbook Problem
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## James Corporation earned net income of $90,000 this year. The company began the year with 600 shares of common stock and issued 500 more on April 1. They issued$5,000 in preferred dividends for the year. What is the EPS for the year for James (rounded to the nearest dollar)?

To determine

Introduction:

Earning per share is the amount earned by the company for each share. It is computed by dividing the profits available for equity stockholders by the weighted average number of equity stock outstanding.

To compute:

The EPS for the Year.

### Explanation of Solution

Computation of EPS:

EPS can be computed by using the following formula,

EPS=Net IncomePreferred DividendsWeighted Average Common Shares Outstanding

Substitute $90,000 for net income,$5,000 for preferred dividends, and 9751 for weighted average shares in the above formula.

EPS=$90,000$5,000975=$85,000975=$87

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