Answer:
Basic earnings per share of common stock for the year were 272 cents
Explanation:
Basic earnings per share = Earnings Attributable to Shareholders of Common Stock/Weighted Average Number of Common Stock in Issue during the year
Calculation of Earnings Attributable to Shareholders of Common Stock :
Net income for the year                                $240,000
Preference Dividends on Preferred Stock (12,000× $50×6%)  ($36,000)
Earnings Attributable to Shareholders of Common Stock     $204,000
Therefore Basic earnings per share = $ 204,000/ 75,000 shares of common stock
                              = 272 cents
Answer: Earning per share of common stock for the year = $2.72
Explanation:
Giving the following ;
Net income for the year = $240,000
Number of shares(preferred stock) outstanding = 12,000
Par value(preferred stock) = $50
Number of shares(common stock) outstanding= 75,000
Basic earning per share of common stock is given by;
Earning per share = Net income - preferred dividend) ÷ weighted average of common shares outstanding during the period
Dividend on preferred stock = 12000 × $50 × 0.06 = $36,000
Earning per share = $(240,000 - 36,000) ÷ 75,000
Earning per share = $204,000 ÷ 75,000 = $2.72
