Question

In 2014, Grumpy Company reported a net income of 1,191,489. It declared and paid preferred stock dividends of217,249. During 2014, Grumpy had a weighted average of 189,289 common shares outstanding. Compute Grumpy's 2014 Earnings Per Share.

Answer 1

Grumpy's 2014 Earnings Per Share is $5.14, computed by dividing the net income by the weighted average number of common shares outstanding.

Step-by-step explanation:

To compute Grumpy's 2014 Earnings Per Share, we need to divide the net income by the weighted average number of common shares outstanding. First, subtract the preferred stock dividends from the net income: 1,191,489 - 217,249 = 974,240. Then divide the result by the weighted average shares: 974,240 / 189,289 = 5.14. Therefore, Grumpy's 2014 Earnings Per Share is $5.14.