Principles of Financial Accounting (Elon University)
Principles of Financial Accounting (Elon University)
11th Edition
ISBN: 9781308839233
Author: Marshall
Publisher: McGraw-Hill Education
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Chapter 10, Problem 10.2ME
To determine

Concept Introduction:

Basic Earnings per share:

The Basic Earnings per share is the amount of net income earned by each common share outstanding. The Earnings per share calculated by with help of following formula:

  Basic Earnings per share=Net Income - Preferred DividendWeighted Average Common Shares Outstanding

   Net Income available to common stockholder = Net income – Preferred Dividend

Stock split:

Stock split refers to the dividing one share into two of more shares. It is usually done to make the share available for small investor with smaller value. A stock split does not affect the total stockholder's equity and it also does not require any journal entry.

To Calculate:

The earnings per share before stock split.

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Earnings per share (EPS), basic and diluted; Author: Bionic Turtle;https://www.youtube.com/watch?v=i2IJTpvZmH4;License: Standard Youtube License