# Ecker Company reports \$2,700,000 of net income and declares \$388,020 of cash dividends on its preferred stock for the year. At year-end, the company had 678,000 weighted-average shares of common stock. 1. What amount of net income is available to common stockholders? 2. What is the company’s basic EPS?

Consider the following explanation

Explanation:

(1) - Net income is available to common stockholders for 2013

Net income is available to common stockholders = Reported Net Income – Preferred Dividend

= \$2,700,000 - 388,020

= \$ 2,311,980

(2) - Company’s Basic EPS for 2013

Basic Earnings Per Share [EPS] = Net income is available to common stockholders / weighted-average shares of common stock

= \$ 2,311,980 / 678,000 Shares

= \$3.41 per share

1.

The net income available to common stockholders is \$2,311,980

2.

The basic EPS is \$3.41 per share.

Explanation:

1.

The net income available to common stockholders is the amount of net income that is left after deducting the preferred dividends from the net income for the year. Thus, net income available to common stockholders is,

Net Income available to common stockholders = Net Income - Preferred stock dividends

Net Income available to common stockholders = 2700000 - 388020

Net Income available to common stockholders = \$2,311,980

2.

The basic EPS or basic earnings per share is the amount of earning or net income that a company has earned on each of its common stock/share. The basic EPS is calculated as follows,

Basic EPS = Net Income available to common stockholders / Weighted average number of common shares outstanding

Basic EPS = 2311980 / 678000

Basic EPS = \$3.41 per share

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a. is usurious.

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d. protects the public against actions that threaten the general welfare.

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Explanation:

Question 1: T

he Covenant not to compete represents a clause in contract law. It is usually referred to as the non-compete clause or the NCC. The essence of the clause is for a party to the contract to agree not to go into a trade, profession or business that is similar or in competition with the other party in the contract. This is usually taken between an employee (who agrees not to compete) with his/her employer.

Based on the explanation the Answer is C

Question 2:

Two things are involved in this contract. First, the contract is an oral agreement and secondly the performance of the agreement is to take place for more than a year (2 years). As such neither party or a third party can enforce the contract.