Chapter 10, Problem 10.9E

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:

  $\text{Basic Earnings per share=}\frac{\text{Net Income - Preferred Dividend}}{\text{Weighted Average Common Shares Outstanding}}$

  $\begin{array}{l} \hfill \\ NetIncomeavailabletocommonstockholder=Netincome–PreferredDividend\hfill \end{array}$

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.

Stock Dividend:

The Stock dividend is the number of shares given as dividend to the shareholders. The Stock dividend is declared first and shares are issued later. There are two journal entries made, one at the time of declaration of stock dividend and another at the time of issuance of shares.

To Indicate:

The Earnings per share originally reported for the year ended Sept. 30, 2016