The amount of earnings per share is usually computed:
A. For both preferred and common stock.
B. For common stock by deducting the dividends on preferred stock from net income and dividing the remaining amount by the weighted average number of common shares outstanding.
C. By dividing net income by the combined number of preferred and common shares.
D. On the basis of the number of shares outstanding at year-end, regardless of changes in the number of shares during the year.
B
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A company used straight-line depreciation for an item of equipment that cost $12,000, had a salvage value of $2,000, and had a five-year useful life. What is the depreciation expense for one year?
a. $1000. b. $1800. c. $2400. d. $2000. e. $2160.
Under modern statutes, the two general prerequisites to the declaration of a dividend are Corporate solvency. A resolution by the directors to declare a dividend.
A. I only. B. II only. C. Both I and II. D. Neither I nor II.