Chapter 10, Problem 10.8E

Exercise 10.8

LO 9

Calculate EPS and effect of stock split on EPS During the year ended December 31, 2017, Gluco, Inc., split its stock on a 3 for-i basis. In its annual report for 2016, the firm reported net income of $925,980 for 2016, with an average 268,400 shares of common stock outstanding for that year. There was no preferred stock.

Required:

1. What amount of net income for 2016 will be reported in Gluco’s 2017 annual report?
2. Calculate Gluco’s earnings per share for 2016 that would have been reported in the 2016 annual report.
3. Calculate Gluco’s earnings per share for 2016 that will be reported in the 2017 annual report for comparative purposes.