Robertson Corporation Reported Net Income for Year 1 of $200,000

question 68

Essay

Robertson Corporation reported net income for Year 1 of $200,000 and Year 2 of $400,000. The weighted-average common shares outstanding 330,000 in Year 1 and 120,000 in Year 2. Robertson also has 10,000 shares of $100 par value, cumulative, 5% preferred stock outstanding in both years. Dividends were not declared in Year 1, but both years' dividends were declared and paid in Year 2. Compute EPS for both years. (Round your answers to the nearest cent.)

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Definitions:

Unprofitable Segment

A part of an organization that consistently fails to contribute a positive net income or adds a financial loss to the company's overall performance.

Opportunity Cost

The revenue that is foregone from an alternative use of an asset, such as cash.

Make-Or-Buy Options

The decision-making process where a company chooses between manufacturing a product in-house or purchasing it from an external supplier.

Differential Revenue

The difference in revenue generated under two different scenarios or choices.