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At December 31, 2010, Cali Corporation has 2,000 shares of $100 par value, 8%, preferred stock outstanding and 100,000 shares of $10 par value common stock issued. Cali's net income for the year is $241,000.
Instructions
Compute the earnings per share of common stock under the following independent situations. (Round to two decimals.)
(a) The dividend to preferred stockholders was declared. There has been no change in the number of shares of common stock outstanding during the year.
(b) The dividend to preferred stockholders was not declared. The preferred stock is cumulative. Cali held 10,000 shares of common treasury stock throughout the year.
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