Southern Corporation Has 20,000 Shares of Common Stock and 5,000

question 53

Essay

Southern Corporation has 20,000 shares of common stock and 5,000 shares of preferred stock outstanding during 2011. Southern reported net income of $60,000 for 2011. Each share of preferred stock is convertible into two shares of common stock. The preferred stock is entitled to a noncumulative annual dividend of $5 per share. After the common stock has been paid a dividend of $1 per share, the preferred stock participates in any additional dividends on a 2:3 per share ratio with the common. For 2011, the common shareholders have been paid $25,000 (or $1.25 per share), and the preferred shareholders have been paid $25,000 (or $5.00 per share).
Required:
Calculate basic earnings per share under the two-class method for 2011.

---

Definitions:

Attachment Study

Research focused on the emotional bonds that form between individuals, particularly between infants and their primary caregivers, and the impact of these bonds on psychological development.

Strange Situation Test

A measurement technique designed by Ainsworth to assess the quality of an infant’s attachment to a caregiver. Infants (12 months or older) and their caregivers are brought to a room (the strange situation) where the child experiences a series of eight 3-minute episodes, each one introducing changes in the social situation, some of which are likely to be stressful, such as an episode when the mother leaves the baby with a stranger. The infant’s willingness to explore the toys and his reactions to his mother and the strangers are observed.

Attachment Interview

A method of assessment designed to evaluate and understand an individual's patterns of attachment based on their responses about close relationships.

Dimensional Analysis

A mathematical technique used to check the consistency of physical dimensions in equations and to convert units from one system to another.