Question

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Problem 2-4 Per-Share Earnings and Dividends [LO 2) 2 3

Answer 1

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Answer 1)	Computation of earning per share
	earning per share = Net income/total number of share outstanding
a	Sales			594000
	Less expenses
	Cost		264000
	Depreciation expenses		66500
	Interest expenses		33500
b	Total expenses			364000
c=a-b	Eearning before tax			230000
d=c*40%	Tax @ 40%			92000
e=c-d	Net income			138000
f	Number of share outstanding			49000
g=e/f	Earning per share			2.82
Answer 2)	Computation of dividend per share
	Dividend per share = Dividend paid/Number of share outstanding
a	Total dividend paid =			40500
b	Number of share outstanding			49000
c=a/b	Dividend per share=			0.83