# Bastion 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 EPS for the year for Bastion?

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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 23EB
Textbook Problem
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## Bastion 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 EPS for the year for Bastion?

To determine

Introduction:

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

To calculate:

The Earnings per Share

### Explanation of Solution

Calculation of Earnings per Share:

Formula to calculate the earnings per share:

EPS=Net IncomePreferred DividendsWeighted Average Common Share Outstanding

Substitute $200,000 for net income,$7,500 for preferred dividends and 160,000 for weighted average common share outstanding in the above formula.

EPS=$200,000$7,50013,7501=\$14

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