The Income Statement of Faster Computers,Inc

question 35

Essay

The income statement of Faster Computers,Inc.showed the following information on December 31,2014.

Compute earnings per share figures for common stock under the assumption that Faster Computer Inc.has
(1)320,000 shares of $24 par value common stock outstanding.
(2)9,600 shares of $100,par 8% cumulative preferred stock,and 240,000 shares of no-par common stock.Dividends are not in arrears.
Note: Assumption (1)is independent of (2).

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Definitions:

Accounts Receivable

Money owed to a business by its clients for goods or services delivered but not yet paid for.

Bad Debts

Amounts owed to a company that are not expected to be received, often due to the debtor being unable to pay. These are often written off as an expense.

Financing Activities

Transactions that result in changes in the size and composition of the equity and borrowings of an entity, as reported in the cash flow statement.