EBK INTERMEDIATE ACCOUNTING: REPORTING
EBK INTERMEDIATE ACCOUNTING: REPORTING
2nd Edition
ISBN: 9781337268998
Author: PAGACH
Publisher: YUZU
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Chapter 16, Problem 17E

1.

To determine

Calculate the earnings per share amount that will be disclosed in 2016 annual report.

1.

Expert Solution
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Explanation of Solution

Earnings per share (EPS):

The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS).

Basic earnings  per share =Net income Number of  shares outstanding in common stock(1)=$5,12510,250=$0.50

Working notes:

(1) Calculate the number of shares outstanding in common stock.

Number of shares outstanding in common stock}=(Number of shares issued in  common stock ×Time period)+(Number of additional stock × Time period)=(9,000×712)+(12,000×512)=$5,250+$5,000=$10,250

2.

To determine

Calculate the 2016 and 2017 basic earnings per share amount that will be disclosed in 2017 annual report.

2.

Expert Solution
Check Mark

Explanation of Solution

Earnings per share (EPS):

The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS).

Basic earnings  per share 2016 =Net income Number of  shares outstanding in common stock(2)=$5,12520,500=$0.25

Basic earnings  per share 2017=Net income Number of  shares outstanding in common stock(3)=$16,40027,333=$0.60

Working notes:

(2) calculate the number of shares outstanding in common stock for the year 2016.

Number of shares outstanding in common stock for 2016}=(Number of shares issued in  common stock ×Stock split ×Time period)+(Number of additional stock ×Stock split ×Time period)=(9,000×2×712)+(12,000×2×512)=$10,500+$10,000=$20,500

(3) calculate the number of shares outstanding in common stock for the year 2017.

Number of shares outstanding in common stock for 2017}=(Number of shares outstandingin the year-end×Stock split ×Time period)+(Number of shares outstanding in the year-end+Number of additional stock×Stock split ×Time period)=(12,000×2×212)+(14,000×2×1012)=$4,000+$23,333=$27,333

3.

To determine

Calculate the 2016, 2017 and 2018 basic earnings per share amount that will be disclosed in 2018 annual report.

3.

Expert Solution
Check Mark

Explanation of Solution

Earnings per share (EPS):

The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS).

Basic earnings  per share 2016 =Net income Number of  shares outstanding in common stock(4)=$5,12520,500=$0.25

Basic earnings  per share 2017=Net income Number of  shares outstanding in common stock(5)=$16,40027,333=$0.60

Basic earnings  per share 2018=Net income Number of  shares outstanding in common stock(6)=$16,40027,333=$0.60

Working notes:

(4) calculate the number of shares outstanding in common stock for the year 2016.

Number of shares outstanding in common stock for 2016}=(Number of shares issued in  common stock ×Stock split×1+Stock dividend ×Time period)+(Number of additional stock×Stock split×1+Stock dividend×Time period)=(9,000×2×1+20%×712)+(12,000×2×1+20%×512)=$12,600+$12,000=$24,600

(5) calculate the number of shares outstanding in common stock for the year 2017.

Number of shares outstanding in common stock for 2017}=(Number of shares issued in  common stock ×Stock split×1+Stock dividend ×Time period)+(Number of additional stock×Stock split×1+Stock dividend×Time period)=(12,000×2×1+20%×212)+(14,000×2×1+20%×1012)=$4,800+$28,000=$32,800

(6) calculate the number of shares outstanding in common stock for the year 2018.

Number of shares outstanding in common stock for 2018}=(Number of shares issued in  common stock ×1+Stockdividend ×Time period)=(28,000×1.20×1212)=$33,600

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Chapter 16 Solutions

EBK INTERMEDIATE ACCOUNTING: REPORTING

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