Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Question
Chapter 13, Problem 13.24EX
(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:
To determine: The earnings per share of Company P for Year 3, Year 2, and Year 1.
(b)
To determine
To evaluate: The growth in earnings per share for 3 years in comparison to the growth in net income for the 3 years.
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Pacific Gas and Electric Company is a large gas and electric utility operating in northern and central California. Three recent years of financial data for Pacific Gas and Electric Company are as follows:
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Earnings per share growth as a…
Pacific Gas and Electric Company is a large gas and electric utility operating in northern
and central California. Three recent years of financial data for Pacific Gas and Electric
Company are as follows:
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(in millions)
Year 3
Year 2
Year 1
$888
$1,450
$828
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Preferred dividends
$14
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Average number of common shares outstanding
444
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nearest cent.
b. Evaluate the growth in earnings per share for the three years in comparison to the
growth in net income for the three years.
EPS
ABC Gas and Electric Company is a large gas and electric utility operating in northern and central California. Three recent years of financial data for ABC Gas and Electric Company are as follows:
Fiscal Years Ended
Year 3
Year 2
Year 1
Net income
$876
$1,320
$808
Preferred dividends
$20
$20
$20
Average number of common shares outstanding
484
468
444
a. Determine the earnings per share for fiscal Year 3, Year 2, and Year 1. Round to two decimal places.
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per share
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$4
per share
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by the minus sign.
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%
Year 2
%
Year 1 Earnings
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Net income growth as a percent of Year 1 (base year)
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Chapter 13 Solutions
Accounting
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