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As of December 31, 2020, Ahab Fisheries Inc. had the following share capital: ·       50,000 common shares                                             $200,000 ·       80,000 $2, non-cumulative,...

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Accounting

As of December 31, 2020, Ahab Fisheries Inc. had the followingshare capital:

·       50,000 common shares                                           $200,000

·       80,000 $2,non-cumulative, preferred shares $600,000

During 2021, the following share transactions occurred:

·       April 1  Issued 10,000 common shares for cash of $ 45,000

·       July 1   Issued 20,000 common shares at $ 4.75 each

·       Dec 15 Cash dividendswere declared for the preferred shares only.

For the year ending December 31, 2021, Ahab had profit of $323,000.

Required

a)      Calculate the profitavailable to common shareholders in 2021.

b)      Calculate the weightedaverage number of common shares in 2021.

c)      Calculate the earnings pershare in 2021. (1 mark)

Answer & Explanation Solved by verified expert
4.3 Ratings (686 Votes)
Solution A CALCULATION OF PROFIT AVAILABLE TO COMMON SHAREHOLDERS Profit 323000 Less Preferred Dividends 80000 Shares X 2 160000 Profit    See Answer
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