Presented Below Are Selected Data from the Financial Statements of Wizard

question 110

Multiple Choice

Presented below are selected data from the financial statements of Wizard Corp. $\begin{array} {l r r } &\underline { \mathbf { 2 0 1 7 } } & \underline { \mathbf { 2 0 1 6 } } \\ \text {Net income}&\$ 150,000 & \$ 120,000 \\\text {Cash dividends paid on preferred stock}& \$ 15,000 & \$ 15,000 \\\text {Cash dividends paid on common stock}& \$ 42,000 & \$ 38,000 \\\text {Weighted average number of preferred shares outstanding}& 20,000 & 20,000 \\\text {Weighted average number of common shares outstanding}& 105,000 & 95,000\\ \end{array}$ Earnings per share is reported on the 2017 income statement as

• A) $1.08
• B) $1.20
• C) $1.29
• D) $1.43

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Definitions:

Compensation Estimates

The calculated projections or assessments of remuneration, including wages, salaries, and bonuses, that employees can expect to receive for their work.

Broadbanding

A strategy in compensation that reduces the complexity of salary grades by combining them into fewer, wider bands to provide more flexibility in job assignments and pay.

Salary Grades

A structured pay scale that categorizes positions based on responsibility levels, skill requirements, and job complexity to determine salary ranges.

Wage and Salary Surveys

Research studies that collect and analyze data on the compensation paid to employees in various positions and industries.