Computing Earnings per Share The income statement, statement of retained earnings, and balance sheet for Jeanette Company are as follows: Jeanette Company Income Statement For the Year Ended December 31, 20X2 Amount Percent Net sales $8,281,989 100.0% Less: Cost of goods sold (5,383,293) 65.0 Gross margin $2,898,696 35.0 Less: Operating expenses (1,323,368) 16.0 Operating income $1,575,328 19.0 Less: Interest expense (50,000) 0.6 Income before taxes $1,525,328 18.4 Less: Income taxes (40%)* (610,131) 7.4 Net income $915,197 11.0 * Includes both state and federal taxes. Jeanette Company Statement of Retained Earnings For the Year Ended December 31, 20X2 Balance, beginning of period $1,979,155 Net income 915,197 Total $2,894,352 Preferred dividends (80,000) Dividends to common stockholders (201,887) Balance, end of period $2,612,465 Jeanette Company Comparative Balance Sheets At December 31, 20X1 and 20X2 20X1 20X2 Assets Current assets: Cash $2,875,000 $2,580,000 Marketable securities 800,000 700,000 Accounts receivable (net) 939,776 690,000 Inventories 490,000 260,000 Other 93,000 74,261 Total current assets $5,197,776 $4,304,261 Property and equipment: Land $1,575,000 $1,067,315 Building and equipment (net) 1,348,800 1,150,000 Total long-term assets $2,923,800 $2,217,315 Total assets $8,121,576 $6,521,576 Liabilities and Stockholders' Equity Current liabilities: Notes payable, short term $1,170,127 $ 543,641 Accounts payable 298,484 101,500 Current maturity of long-term debt 3,000 2,000 Accrued payables 200,000 57,780 Total current liabilities $1,671,611 $ 704,921 Long-term liabilities: Bonds payable, 10% 500,000 500,000 Total liabilities $2,171,611 $1,204,921 Stockholders' equity: Preferred stock, $25 par, 8% $1,000,000 $1,000,000 Common stock, $0.70 par 337,500 337,500 Additional paid-in capital* 2,000,000 2,000,000 Retained earnings 2,612,465 1,979,155 Total stockholders' equity $5,949,965 $5,316,655 Total liabilities and stockholders' equity $8,121,576 $6,521,576 * For common stock only. Required: 1. Compute the number of common shares. Round your answer to the nearest dollar. fill in the blank 1 shares 2. Compute earnings per share. Round your answer to the nearest cent. $fill in the blank 2 per share

Computing Earnings per Share The income statement, statement of retained earnings, and balance sheet for Jeanette Company are as follows: Jeanette Company Income Statement For the Year Ended December 31, 20X2 Amount Percent Net sales $8,281,989 100.0% Less: Cost of goods sold (5,383,293) 65.0 Gross margin $2,898,696 35.0 Less: Operating expenses (1,323,368) 16.0 Operating income $1,575,328 19.0 Less: Interest expense (50,000) 0.6 Income before taxes $1,525,328 18.4 Less: Income taxes (40%)* (610,131) 7.4 Net income $915,197 11.0 * Includes both state and federal taxes. Jeanette Company Statement of Retained Earnings For the Year Ended December 31, 20X2 Balance, beginning of period $1,979,155 Net income 915,197 Total $2,894,352 Preferred dividends (80,000) Dividends to common stockholders (201,887) Balance, end of period $2,612,465 Jeanette Company Comparative Balance Sheets At December 31, 20X1 and 20X2 20X1 20X2 Assets Current assets: Cash $2,875,000 $2,580,000 Marketable securities 800,000 700,000 Accounts receivable (net) 939,776 690,000 Inventories 490,000 260,000 Other 93,000 74,261 Total current assets $5,197,776 $4,304,261 Property and equipment: Land $1,575,000 $1,067,315 Building and equipment (net) 1,348,800 1,150,000 Total long-term assets $2,923,800 $2,217,315 Total assets $8,121,576 $6,521,576 Liabilities and Stockholders' Equity Current liabilities: Notes payable, short term $1,170,127 $ 543,641 Accounts payable 298,484 101,500 Current maturity of long-term debt 3,000 2,000 Accrued payables 200,000 57,780 Total current liabilities $1,671,611 $ 704,921 Long-term liabilities: Bonds payable, 10% 500,000 500,000 Total liabilities $2,171,611 $1,204,921 Stockholders' equity: Preferred stock, $25 par, 8% $1,000,000 $1,000,000 Common stock, $0.70 par 337,500 337,500 Additional paid-in capital* 2,000,000 2,000,000 Retained earnings 2,612,465 1,979,155 Total stockholders' equity $5,949,965 $5,316,655 Total liabilities and stockholders' equity $8,121,576 $6,521,576 * For common stock only. Required: 1. Compute the number of common shares. Round your answer to the nearest dollar. fill in the blank 1 shares 2. Compute earnings per share. Round your answer to the nearest cent. $fill in the blank 2 per share

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Computing Earnings per Share

The income statement, statement of retained earnings, and balance sheet for Jeanette Company are as follows:

Jeanette Company Income Statement For the Year Ended December 31, 20X2
	Amount	Percent
Net sales	$8,281,989	100.0%
Less: Cost of goods sold	(5,383,293)	65.0
Gross margin	$2,898,696	35.0
Less: Operating expenses	(1,323,368)	16.0
Operating income	$1,575,328	19.0
Less: Interest expense	(50,000)	0.6
Income before taxes	$1,525,328	18.4
Less: Income taxes (40%)*	(610,131)	7.4
Net income	$915,197	11.0
* Includes both state and federal taxes.

Jeanette Company Statement of Retained Earnings For the Year Ended December 31, 20X2
Balance, beginning of period	$1,979,155
Net income	915,197
Total	$2,894,352
Preferred dividends	(80,000)
Dividends to common stockholders	(201,887)
Balance, end of period	$2,612,465

Jeanette Company Comparative Balance Sheets At December 31, 20X1 and 20X2
	20X1	20X2
Assets
Current assets:
Cash	$2,875,000	$2,580,000
Marketable securities	800,000	700,000
Accounts receivable (net)	939,776	690,000
Inventories	490,000	260,000
Other	93,000	74,261
Total current assets	$5,197,776	$4,304,261
Property and equipment:
Land	$1,575,000	$1,067,315
Building and equipment (net)	1,348,800	1,150,000
Total long-term assets	$2,923,800	$2,217,315
Total assets	$8,121,576	$6,521,576
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable, short term	$1,170,127	$ 543,641
Accounts payable	298,484	101,500
Current maturity of long-term debt	3,000	2,000
Accrued payables	200,000	57,780
Total current liabilities	$1,671,611	$ 704,921
Long-term liabilities:
Bonds payable, 10%	500,000	500,000
Total liabilities	$2,171,611	$1,204,921
Stockholders' equity:
Preferred stock, $25 par, 8%	$1,000,000	$1,000,000
Common stock, $0.70 par	337,500	337,500
Additional paid-in capital*	2,000,000	2,000,000
Retained earnings	2,612,465	1,979,155
Total stockholders' equity	$5,949,965	$5,316,655
Total liabilities and stockholders' equity	$8,121,576	$6,521,576
* For common stock only.

Required:

1. Compute the number of common shares. Round your answer to the nearest dollar.
fill in the blank 1 shares

2. Compute earnings per share. Round your answer to the nearest cent.
$fill in the blank 2 per share

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