Blues Inc. manufactures jeans in the cutting and sewing process. Jeans are manufactured in 40-jean batch sizes. The cutting time
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THE COMPANY'S EARNING PER SHARE FOR THE YEAR WILL BE $2.30 PER SHARE.
Explanation:
FOR CALCULATING EARNING PER SHARE WE HAVE TO USED THE FOLLOWING FORMULA:
EARNING PER SHARE =
GIVEN:
NET INCOME = $9,660,000
NO. OF OUTSTANDING SHARE AT BEGINNING OF YEAR = 4,100,000
NO. OF OUTSTANDING SHARE AT END OF YEAR = 4,300,000
AS PER GIVEN FORMULA :
AVERAGE COMMON STOCK OUT STANDING = = 4200000 SHARES
NOW WE WILL FIND EARNING PER SHARE USING ABOVE FORMULA:
EARNING PER SHARE = $ 2.30 PER SHARE