On December 31, 2012, Witherspoon Services Had 800,000 Shares of Common

question 99

Essay

On December 31, 2012, Witherspoon Services had 800,000 shares of common stock and 200,000 shares of 5.5%, noncumulative, nonconvertible $10 par preferred stock issued and outstanding.
On March 2, 2013, Witherspoon sold 120,000 common shares. In keeping with its long-term share repurchase plan, 30,000 shares were retired on August 31. Witherspoon distributed a 10% common stock dividend on June 3. Witherspoon's net income for the year ended December 31, 2011, was $600,000. The company paid cash dividends of $110,000 to preferred shareholders on December 20, 2013. The income tax rate is 40%.
Required:
Compute Witherspoon's earnings per share for the year ended December 31, 2013.

---

Definitions:

Task Specialization

The process in which different individuals or groups in a society become experts in specific work tasks, contributing to efficiency and skill development.

International Division

The separation of tasks, production, or industries among various nations, often based on economic factors or specialized skills.

Tourism

The practice of traveling to and exploring places of interest for leisure, recreation, or cultural experiences.

Car Manufacture

The process of designing, producing, and selling motor vehicles, an industry that involves a range of technologies and is crucial to global economics.