# Errol Corporation earned net income of $200,000 this year. The company began the year with 10,000 shares of common stock and issued 5,000 more on April 1. They issued$7,500 in preferred dividends for the year. What is the numerator of the EPS calculation for Errol?

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 14, Problem 22EB
Textbook Problem
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## Errol Corporation earned net income of $200,000 this year. The company began the year with 10,000 shares of common stock and issued 5,000 more on April 1. They issued$7,500 in preferred dividends for the year. What is the numerator of the EPS calculation for Errol?

To determine

Introduction:

Earning per share can be explained as the net income which is available to the common stock shareholders for distribution after the payment of preferred dividend.

To calculate:

The numerator part of the formula which is used in the calculation of EPS for Corporation EO.

### Explanation of Solution

The formula to calculate the numerator part of the formula which is used in the calculation of EPS for Corporation EO is as shown below:

Numerator of EPS=Net Income Preferred Dividend

Substitute $200,000 for net income and$7,500 for preferred dividend in the above formula

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