Reference no: EM132511854
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:
Year 2
Total current assets $600,000
Total investments 60,000
Total property, plant, and equipment 900,000
Total current liabilities 125,000
Total long-term liabilities 350,000
Preferred 9% stock, $100 par 100,000
Common stock, $10 par 600,000
Paid-in capital in excess of par-Common stock 75,000
Retained earnings 310,000
Year 1
Total current assets $560,000
Total investments 40,000
Total property, plant, and equipment 700,000
Total current liabilities 65,000
Total long-term liabilities 250,000
Preferred 9% stock, $100 par 100,000
Common stock, $10 par 600,000
Paid-in capital in excess of par-Common stock 75,000
Question 1: 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?
Option a. $4.16
Option b. $4.32
Option c. $4.02
Option d. $2.49
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