Question

At the end of the year, the records of NCIS Corporation provided the following selected and incomplete data: Common stock ($10 par value); no changes in account during the year. Shares authorized: 210,000. Shares issued: _______ (all shares were issued at $15 per share; $2,130,000 total cash collected). Treasury stock: 4,000 shares (repurchased at $22 per share). The treasury stock was acquired after a stock split was announced. Net income: $262,200. Dividends declared and paid: $140,760. Retained earnings beginning balance: $565,000.Required: 1. Complete the following tabulation: Shares authorized Shares issued Shares outstanding 2. What is the balance in the Additional Paid-in Capital account. Additional paid-in capital 3. What is earnings per share (EPS). (Round your answer to 2 decimal places.) Earnings per share

Answer 1

Answer:

1) Shares authorized: 210,000.

Shares issued: 142,000 shares

Shares outstanding: 135,000 shares

2) Balance in Additional paid in Capital is $710,000

3) Earning Per Share is $1.94 per share

Explanation:

1) Shares Authorized = 210,000 shares

Shares issued = Cash Collected ÷ Issue Price

= $2,130,000 ÷ $15 per share = 142,000

Shares outstanding = Shares issued - Treasury Stock

= 142,000 shares - 7,000 shares

= 135,000 shares

2) Balance in Additional paid in Capital = (Issue Price - Par Value) × Shares issued

= ($15 - $10) × 142,000 shares

= $710,000

3) Earning Per Share = Net Income ÷ Shares Outstanding

= $262,200 ÷ 135,000 shares

= $1.94 per share