The net income of F.F. Inc., amounted to $1,920.000 for the current year.
a. Compute the amount of earnings per share assuming that the shares of capital stock outstanding throughout the year consisted of:
- 400,000 shares of $1 par value common stock and no preferred stock.
- 100,000 shares of 8 percent, $100 par value preferred stock and 300,000 shares of $5 par value common stock.
b. Is the earnings per share figure computed inn part a (2) considered to be basic or diluted? Explain