Question

Anjou Company had 10,000 shares of common stock outstanding at December 31, 2018 and 14,000 shares of common stock outstanding at December 31, 2019. Anjou had sales of $3,600,000 in 2019 and net income of $280,000 in 2019. What is the earnings per share amount reported for Anjou in 2019?

Answer 1

Answer:

The correct answer is $23,33 per share.

Explanation:

According to the scenario, the given data are as follows:

Net income for 2019 = $280,000

Number of shares in 2018 = 10,000

Number of shares in 2019 = 14,000

So weighted average number of shares = (10,000 + 14,000) ÷ 2

= 12,000

So, we can calculate the earnings per share by using following formula:

Earning per share = Net income for 2019 ÷ weighted average number of shares

By putting the value, we get

$280,000 ÷ 12,000

= $23.33 per share