Answer:
Earnings per share = $0.64
Explanation:
To calculate the Earnings per share, we first need to compute weighted average number of shares:
Jan.1: 900,000 * (12/12) = 900,000 * 1.05 = 945,000
Apr.30: 60,000 * (8/12) = 40,000 * 1.05 = 42,000
Jun.1: 72,000 * (7/12) = <u>42,000</u>
Weighted Average No. of Shares Outstanding = <u>1,029,000</u>
Note: We multiplied by 1.05 factors on Jan.1 and Apr.30 to account for 5% declared and distribution of a stock dividend.
Earnings Per Share = <u> Net Income </u>
Weighted Average No.of Shares Outstanding
Earnings Per Share = <u>655,000</u>
1,029,000
Earnings Per Share = $0.64
