Information Concerning the Capital Structure of Shepherd Corporation Follows

question 44

Multiple Choice

Information concerning the capital structure of Shepherd Corporation follows During 2020, Shepherd paid dividends of $ 1.00 per common share and $ 2.50 per preferred share. The preferred shares are non-cumulative, and convertible into 20,000 common shares. The 9% convertible bonds are convertible into 50,000 common shares. Net income for calendar 2020 was $ 500,000. Assume the income tax rate is 30%. Basic earnings per share for 2020 is

• A) $ 3.33.
• B) $ 3.65.
• C) $ 4.75.
• D) $ 5.00.

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Definitions:

Production Process

The sequence of operations or steps taken to convert raw materials into finished goods.

Weighted-Average Method

An inventory costing method that assigns a weighted average cost to items, blending the costs of similar items.

Units Transferred

The quantity of goods moved from one process, department, or stage of production to another.

Cost Category

A classification of costs based on their nature or function within a business, often used for accounting and budgeting purposes.