Calculate earnings per share and comment on trend

Question

Task: Calculate earnings per share and comment on the trend.

The Dicker Company has the following pattern of financial data for Years 1 and 2:

                                                Year 1     Year 2

Net Income                              $40,000     $42,000
Preferred stock (5%)               $450,000    $550,000
Weighted average number of
Common shares outstanding      38,000       38,000

Calculate earnings per share and comment on trend.