Excerpts from Goodrow Corporation’s most recent balance sheet and income statement appear below:
| Year 2 | Year 1 | |
| Total assets | $7,689 | $7,830 |
| Total liabilities | $1,360 | $1,380 |
| Stockholders’ equity: | ||
| Preferred stock, $100 par value, 10% | $950 | $950 |
| Common stock, $2 par value | 3,800 | 3,800 |
| Additional paid in capital common stock | 980 | 980 |
| Retained earnings |
599 |
720 |
| Total stockholders’ equity |
$6,329 |
$6,450 |
| Sales (all on account) | $3,030 |
| Cost of goods sold |
1,820 |
| Gross margin | 1,210 |
| Selling and administrative expense |
910 |
| Net operating income | 300 |
| Interest expense |
66 |
| Net income before taxes | 234 |
| Income taxes (30%) |
70 |
| Net income |
$164 |
Dividends on common stock during Year 2 totaled $190. Dividends on preferred stock totaled $95. The market price of common stock at the end of Year 2 was $5.68 per share.
The earnings per share of common stock for Year 2 is closest to:
(PLEASE SHOW WORK FOR RATING)
A. $0.12
B. $0.16
C. $0.09
D. $0.04
2.)Archer Company had net income of $71,000 last year. The company has 6,000 shares of common stock and 3,500 shares of preferred stock outstanding. There was no change in the number of common or preferred shares outstanding during the year. Preferred dividends were $4 per share. The earnings per share of common stock was:
(PLEASE SHOW WORK TO GET RATED)
A. $9.50
B. $5.50
C. $16.29
D. $11.25