Question

Ecker Company reports $1,850,000 of net income and declares $259,000 of cash dividends on its preferred stock for the year. At year-end, the company had 370,000 weighted-average shares of common stock. 1. What amount of net income is available to common stockholders?

Answer 1

$1,591,000

Step-by-step explanation:

The computation of the net income is available to common stockholders is shown below:

= Net income reported by Ecker Company - cash dividend declared on its preferred stock

= $1,850,000 - $259,000

= $1,591,000

Simply we deduct the preference dividend from the net income reported by the company so that the remaining balance is available to common stockholders

All other information which is given is not relevant. Hence, ignored it