Wildhorse Inc. presented the following data.Net income $2,440,000Preferred stock: 52,000 shares outstanding, $100 par, 8% cumulative, not convertible 5,200,000Common stock: Shares outstanding 1/1 784,800 Issued for cash, 5/1 312,000 Acquired treasury stock for cash, 8/1 151,200 2-for-1 stock split, 10/1 Compute earnings per share. (Round answer to 2 decimal places, e.g. $2.55.)Earnings per share $enter earnings per share rounded to 2 decimal places

The ratio analysis helps to analyze the financial statements of the business. Calculation of weighted average shares Whole Weighted average calculation Weighted average number of shares 1/1 Shares outstanding 784,800 784,800 * 4/12 = 261,600 5/1 Issued for cash- 312,000 1,096,800 1,096,800 * 3/12 = 274,200 8/1 Treasury stock acquired-151,200 945,600 945,600 * 2/12 = 157,600 10/1 2-for 1 stock split 1,891,200 1,891,200 * 3/12 = 472,800 Total 1,166,200 Net income = $2,440,000 Preference dividend = 5,200,000 * 8% = $416,000 Weighted average number of common shares = 1,166,200 Earnings per share = (Net income – preference dividend) / Weighted average number of common shares = (2,440,000 – 416,000) / 1,166,200 = $1.74

Answered: Wildhorse Inc. presented the following…

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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Wildhorse Inc. presented the following data.

Net income		$2,440,000
Preferred stock: 52,000 shares outstanding, $100 par, 8% cumulative, not convertible		5,200,000
Common stock: Shares outstanding 1/1		784,800
Issued for cash, 5/1		312,000
Acquired treasury stock for cash, 8/1		151,200
2-for-1 stock split, 10/1

Compute earnings per share. (Round answer to 2 decimal places, e.g. $2.55.)

Earnings per share

$enter earnings per share rounded to 2 decimal places

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