uestion Content Area Comparative Earnings per Share Lucas Company reports net income of $5,125 for the year ended December 31, 2019, its first year of operations. On January 4, 2019, Lucas issued 9,000 shares of common stock. On August 2, 2019, it issued an additional 3,000 shares of stock, resulting in 12,000 shares outstanding at year-end. During 2020, Lucas earned net income of $16,400. It issued 2,000 additional shares of stock on March 3, 2020, and declared and issued a 2-for-1 stock split on November 3, 2020, resulting in 28,000 shares outstanding at year-end. During 2021, Lucas earned net income of $23,520. The only common stock transaction during 2021 was a 20% stock dividend issued on July 2, 2021. Compute the 2019 comparative basic earnings per share that would be disclosed in the 2021 annual report.
Question Content Area
Comparative Earnings per Share
Lucas Company reports net income of $5,125 for the year ended December 31, 2019, its first year of operations. On January 4, 2019, Lucas issued 9,000 shares of common stock. On August 2, 2019, it issued an additional 3,000 shares of stock, resulting in 12,000 shares outstanding at year-end.
During 2020, Lucas earned net income of $16,400. It issued 2,000 additional shares of stock on March 3, 2020, and declared and issued a 2-for-1 stock split on November 3, 2020, resulting in 28,000 shares outstanding at year-end.
During 2021, Lucas earned net income of $23,520. The only common stock transaction during 2021 was a 20% stock dividend issued on July 2, 2021.
Compute the 2019 comparative basic earnings per share that would be disclosed in the 2021 annual report.
To get a company's earnings per share, divide its revenue by the total number of outstanding shares of its common stock (EPS). The resulting figure is used to evaluate a business's profitability. Businesses regularly announce EPS that has been adjusted to reflect unusual expenses and possible share dilution.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
