Earnings per share: Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders’. The following formula can be used to calculate earnings per share: Earnings per share = Net income ( loss ) – Preferred dividends Average number of common shares outstanding The earnings per share of Company P for Year 1-3.

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Answer 1

Question

Chapter 12, Problem 12.2ADM

(a)

To determine

Earnings per share:

Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders’.

The following formula can be used to calculate earnings per share:

Earnings per share = Net income(loss) – Preferred dividendsAverage number of common shares outstanding

The earnings per share of Company P for Year 1-3.

(b)

To determine

To interpret: The trend in earnings per share using horizontal analysis for 3 years in terms of change in earnings and average shares outstanding.

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A company enters into a contract to sell 70 products to a customer for $80 each. After the company transfers 30 of the 70 products, the customer orders an additional 25 products. The contract is modified, and the additional 25 products are priced at $40 each. $40 is not reflective of the product's standalone selling price. What is the price per product for the remaining 65 products (40 products from the original contract and 25 products from the modification)? A. $80 for the remaining 40 from the original contract and $40 for the additional 25products from the modification B. $60, the average of the prices for the remaining products C. $40, the new price for the products specified in the contract modification D. $64.62, the blended price for the products from the original contract and the modification

Answer 2

Question

Chapter 12, Problem 12.2ADM

(a)

To determine

Earnings per share:

Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders’.

The following formula can be used to calculate earnings per share:

Earnings per share = Net income(loss) – Preferred dividendsAverage number of common shares outstanding

The earnings per share of Company P for Year 1-3.

(b)

To determine

To interpret: The trend in earnings per share using horizontal analysis for 3 years in terms of change in earnings and average shares outstanding.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 12, Problem 12.2ADM

(a)

To determine

Earnings per share:

Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders’.

The following formula can be used to calculate earnings per share:

Earnings per share = Net income(loss) – Preferred dividendsAverage number of common shares outstanding

The earnings per share of Company P for Year 1-3.

(b)

To determine

To interpret: The trend in earnings per share using horizontal analysis for 3 years in terms of change in earnings and average shares outstanding.

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 12.2ADM

(a)

To determine

Earnings per share:

Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders’.

The following formula can be used to calculate earnings per share:

Earnings per share = Net income(loss) – Preferred dividendsAverage number of common shares outstanding

The earnings per share of Company P for Year 1-3.

(b)

To determine

To interpret: The trend in earnings per share using horizontal analysis for 3 years in terms of change in earnings and average shares outstanding.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 12.2ADM

(a)

To determine

Earnings per share:

Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders’.

The following formula can be used to calculate earnings per share:

Earnings per share = Net income(loss) – Preferred dividendsAverage number of common shares outstanding

The earnings per share of Company P for Year 1-3.

(b)

To determine

To interpret: The trend in earnings per share using horizontal analysis for 3 years in terms of change in earnings and average shares outstanding.

Answer 6

Chapter 12, Problem 12.2ADM

(a)

To determine

Earnings per share:

Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders’.

The following formula can be used to calculate earnings per share:

Earnings per share = Net income(loss) – Preferred dividendsAverage number of common shares outstanding

The earnings per share of Company P for Year 1-3.

Answer 7

Chapter 12, Problem 12.2ADM

(a)

To determine

Earnings per share:

Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders’.

The following formula can be used to calculate earnings per share:

Earnings per share = Net income(loss) – Preferred dividendsAverage number of common shares outstanding

The earnings per share of Company P for Year 1-3.

Answer 8

(b)

To determine

To interpret: The trend in earnings per share using horizontal analysis for 3 years in terms of change in earnings and average shares outstanding.

Answer 9

(b)

To determine

To interpret: The trend in earnings per share using horizontal analysis for 3 years in terms of change in earnings and average shares outstanding.

Answer 10

Expert Solution & Answer

Answer 11

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Answer 12

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Answer 13

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Solution Summary: The author explains how the following formula can be used to calculate the earnings per share of Company P for Year 3, Year 2, and Year 1.

To interpret: The trend in earnings per share using horizontal analysis for 3 years in terms of change in earnings and average shares outstanding.

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Chapter 12 Solutions