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sammy [17]
3 years ago
9

Sosa Diet Supplements had earnings after taxes of $1,170,000 in 20X1 with 347,000 shares of stock outstanding. On January 1, 20X

2, the firm issued 103,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 31 percent.
a. Compute earnings per share for the year 20X1. (Round your answer to 2 decimal places.)
b. Compute earnings per share for the year 20X2. (Round your answer to 2 decimal places.)
Business
1 answer:
Sphinxa [80]3 years ago
8 0

Answer:

A. $3.37

B. $3.41

Explanation:

A.Computation for earnings per share for the year 20X1

20X1 Earnings per share= $1,170,000/347,000

20X1 Earnings per share= $3.37

Therefore earnings per share for the year 20X1 will be $3.37

B. Computation for earnings per share for the year 20X2.

First step is to calculate the Earnings available to common stockholders

Earnings available to common stockholders = $1,170,000x (1+.31 )

Earnings available to common stockholders = $1,170,000x 1.31

Earnings available to common stockholders = = $1,532,700

Second step is to calculate the Common shares outstanding

Common shares outstanding = 347,000 + 103,000

Common shares outstanding = 450,000

Now let calculate the earnings per share for the year 20X2

20X2 Earnings per share=$1,532,700/450,000

20X2 Earnings per share = $3.41

Therefore earnings per share for the year 20X2 will be $3.41

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3 years ago
Alpaca Corporation had revenues of $290,000 in its first year of operations. The company has not collected on $18,600 of its sal
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Answer:

$118,860

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= $190,000 - $12,000 - $3,600 - $4,600

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Yellowstone Corporation has just announced the repurchase of $125,000 of its stock. The company has 39,000 shares outstanding an
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Answer:

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Revised EPS = Earning / New shares = $128,310 / 37,357.21 shares = $3.43

Now we need to calculate the Price earning ratio

P/E Ratio = Price per share / Revised earning per share = $76.09 / $3.43 = 22.18 times

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