Financial Statements for Larosa Company Appear Below Total Dividends During Year 2 Were

question 109

Multiple Choice

Financial statements for Larosa Company appear below:

$\begin{array}{|l|r|}\hline & \begin{array}{r}\text { Larned Company } \\\text { Income Statement }\\\text { For the Year Ended December 31, Year 2 }\\\text { (dollars in thousands) }\end{array} \\\\hline \text { Sales (All on Account) } & \$ 1870 \\\hline \text { Costs of Goods Sold } & \$ 1300 \\\hline \text { Gross Margin } & \$ 570 \\\hline \text { Operating Expenses } & \$ 220 \\\hline \text { Net Operating Income } & \$ 350 \\\hline \text { Interest Expense } & \$ 40 \\\hline \text { Net Income before Taxes } & \$ 310 \\\hline \text { Income Taxes }(30 \%) & \$ 93 \\\hline \text { Net Income } & \$ 217 \\\hline\end{array}$
Total dividends during Year 2 were $\$ 47,000$ , of which $\$ 10,000$ were preferred dividends. The market price of a common share on December 31 , Year 2 was $\$ 70$ .



-Larosa Company's earnings per common share for Year 2 was closest to which of the following?

• A) $3.09.
• B) $9.41.
• C) $9.86.
• D) $14.09.

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Definitions:

Unsafe Working Conditions

Work environments that pose hazards to employees' health or safety, often in violation of occupational safety and health standards.

Wagner Act

A foundational piece of U.S. labor law that established the rights of employees to organize into unions, engage in collective bargaining, and take collective action such as strikes.

Supervisor

An individual who has the authority and responsibility to oversee and guide the work of others in an organizational setting.

Unionizing

The process by which workers come together to form a union in order to collectively negotiate with their employer over labor rights and conditions.