P3–5 Calculation of EPS and retained earnings Everdeen Mining, Inc., ended 2015 with a
net profit before taxes of $436,000. The company is subject to a 40% tax rate and
must pay $64,000 in preferred stock dividends before distributing any earnings on
the 170,000 shares of common stock currently outstanding.
a. Calculate Everdeen’s 2015 earnings per share (EPS).
b. If the firm paid common stock dividends of $0.80 per share, how many dollars
would go to retained earnings?