Select Corporation was incorporated on January 2. The following information pertains to Select Corporation's common stock transactions. Jan. 2 Number of shares authorized 400,000 Jan. 2 Number of shares issued 136,000 Jul. 1 Number of shares reacquired but not canceled 8,000 Sept. 1 Two-for-one stock split Dec. 1 Reissued shares of treasury stock Required a. Determine the weighted-average number of shares of Select Corporation's common stock outstanding. Note: Round amount to the nearest whole number. Number of shares 8,000 175,333 x Basic EPS $ b. Compute earnings per share considering the following additional information: 1. Net income: $495,000 2. Preferred stock, 5%, cumulative 8,000 shares outstanding, $10 par value per share 3. Preferred stock dividends declared during the year: $0 Note: Enter the earnings per share amount in dollars and cents, rounded to the nearest penny. Net Income Available to Weighted Avg. Common Common Stockholders Shares Outstanding 491,000 ✓ 175,333 * $ Per Share 2.8 x

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Calculating EPS: Simple Capital Structure
Select Corporation was incorporated on January 2. The following information pertains to Select Corporation's common stock transactions.
Jan. 2 Number of shares authorized
Jan. 2 Number of shares issued
Jul. 1 Number of shares reacquired but not canceled
Sept. 1 Two-for-one stock split
Dec. 1 Reissued shares of treasury stock
Number of shares
Required
a. Determine the weighted-average number of shares of Select Corporation's common stock outstanding.
Note: Round amount to the nearest whole number.
400,000
136,000
8,000
175,333 x
Basic EPS $
8,000
b. Compute earnings per share considering the following additional information:
1. Net income: $495,000
2. Preferred stock, 5%, cumulative 8,000 shares outstanding, $10 par value per share
3. Preferred stock dividends declared during the year: $0
Note: Enter the earnings per share amount in dollars and cents, rounded to the nearest penny.
Net Income Available to
Common Stockholders
491,000 ✓
Weighted Avg. Common
Shares Outstanding
175,333 * $
Per
Share
2.8 x
Transcribed Image Text:Calculating EPS: Simple Capital Structure Select Corporation was incorporated on January 2. The following information pertains to Select Corporation's common stock transactions. Jan. 2 Number of shares authorized Jan. 2 Number of shares issued Jul. 1 Number of shares reacquired but not canceled Sept. 1 Two-for-one stock split Dec. 1 Reissued shares of treasury stock Number of shares Required a. Determine the weighted-average number of shares of Select Corporation's common stock outstanding. Note: Round amount to the nearest whole number. 400,000 136,000 8,000 175,333 x Basic EPS $ 8,000 b. Compute earnings per share considering the following additional information: 1. Net income: $495,000 2. Preferred stock, 5%, cumulative 8,000 shares outstanding, $10 par value per share 3. Preferred stock dividends declared during the year: $0 Note: Enter the earnings per share amount in dollars and cents, rounded to the nearest penny. Net Income Available to Common Stockholders 491,000 ✓ Weighted Avg. Common Shares Outstanding 175,333 * $ Per Share 2.8 x
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