Earnings per share Financial statement data for the years 20Y5 and 20Y6 for Black Bull Inc. follow: 20Y5 20Y6 Net income $1,324,000 $2,630,000 Preferred dividends $50,000 $50,000 Average number of common shares outstanding 70,000 shares 120,000 shares a. Determine the earnings per share for 20Y5 and 20Y6. Round to two decimal places. 20Y5 20Y6 Earnings per Share $fill in the blank 1 $fill in the blank 2 b. Is the change in the earnings per sha

Question Completion:

b. Is the change in the earnings per share from 20Y5 to 20Y6 favorable or unfavorable?

Black Bull Inc.

                                                 20Y5          20Y6

1. Earnings per share (EPS)   $18.20          $21.50

2. The change in the earnings per share from 20Y5 to 20Y6 is favorable.

More revenue and profits were generated in 20Y6 and despite the increased number of shares outstanding, the EPS for 20Y6 performed better than 20Y5's.

Explanation:

a) Data and Calculations:

                                                    20Y5                            20Y6

Net income                         $1,324,000                 $2,630,000

Preferred dividends               $50,000                      $50,000

Earnings available to common

 stockholders                    $1,274,000                $2,580,000  

Average number of

common shares outstanding 70,000 shares    120,000 shares

Earnings per share (EPS)   $18.20                         $21.50

                                  ($1,274,000/70,000)  ($2,580,000/120,000)

statement of owner"s equity;

answer; i believe that the correct answer is (d); the business benefits because owners can share responsibilities;