Use This Information for Kellman Company to Answer the Questions $\text { Kellman Company }$

question 10

Multiple Choice

Use this information for Kellman Company to answer the questions that follow.
​
The balance sheets at the end of each of the first two years of operations indicate the following:
​
$\text { Kellman Company }$
$\begin{array}{lrr}&\text { Year } 2&\text { Year } 1\\\text { Total current assets } & \$ 600,000 & \$ 560,000 \\\text { Total investments } & 60,000 & 40,000 \\\text { Total property, plant, and equipment } & 900,000 & 700,000 \\\text { Total current liabilities } & 125,000 & 65,000 \\\text { Total long-term liabilities } & 350,000 & 250,000 \\\text { Preferred } 9 \% \text { stock, } \$ 100 \text { par } & 100,000 & 100,000 \\\text { Common stock, } \$ 10 \text { par } & 600,000 & 600,000 \\\text { Paid-in capital in excess of par-Common stock } & 75,000 & 75,000 \\\text { Retained earnings } & 310,000 & 210,000\end{array}$
-Using the balance sheets for Kellman Company, if net income is $250,000 and interest expense is $30,000 for Year 2, what are the earnings per share on common stock for Year 2?

• A) $4.16
• B) $4.32
• C) $4.02
• D) $2.49

---

Definitions:

Hospitalized

The condition of being admitted to a hospital for treatment, observation, or recovery from illness, injury, or other medical conditions.

Buying and Selling

The basic components of commerce, where goods or services are purchased by buyers from sellers in exchange for money.

Consumers

Individuals or groups who are the final users of products and services produced within an economic system.

Web Portal

An Internet site whose purpose is to be a major starting point for users when they connect to the web.