The Alford Group had 310,000 shares of common stock outstanding at January 1, 2018. The following...

The Alford Group had 310,000 shares of common stock outstanding at January 1, 2018. The following activities affected common shares during the year. There are no potential common shares outstanding.

2018
Feb.	28	Purchased 21,000 shares of treasury stock.
Oct.	31	Sold the treasury shares purchased on February 28.
Nov.	30	Issued 84,000 new shares.
Dec.	31	Net income for 2018 is $909,000.

2019
Jan.	15	Declared and issued a 2-for-1 stock split.
Dec.	31	Net income for 2019 is $909,000.

Required:

1. Determine the 2018 EPS.
2. Determine the 2019 EPS.
3. At what amount will the 2018 EPS be presented in the 2019 comparative financial statements?

(For all requirements, Enter your answers in thousands.)

Solutions

Expert Solution

1.Computation of 2018 EPS.

EPS = Net Income / No of shares outstanding

Net Income = $ 9,09,000

No of shares = 310000 – (21000 x 10/12) + (21000 x 2/12) + (84000 x 1/12)

= 310000 – 17500 + 3500 + 7000

= 303000 Shares

EPS = $ 909000 / 303000

= $ 3 / Share

2.Computation of 2019 EPS.

Net Income = $ 9,09,000

No of shares = [ 310000 – 21000 + 21000 + 84000 ] x 2

= 7,88,000 Shares

EPS = $ 909000 / 788000 Shares

= $ 1.15 / Share

3. 2018 EPS be presented in the 2019 comparative financial statements

Net Income = $ 9,09,000

No of shares = 303000 (weighted-average sharesas previously calculated) x 2(stock splitadjustment)

= 6,06,000 Shares

EPS = $ 909000 / 606000 Shares

= $ 1.50 / Share

ekkarill92 answered 10 months ago

Next > < Previous

Related Solutions

The Alford Group had 250,000 shares of common stock outstanding at January 1, 2021. The following...

The Alford Group had 250,000 shares of common stock outstanding at January 1, 2021. The following activities affected common shares during the year. There are no potential common shares outstanding. 2021 Feb. 28 Purchased 3,000 shares of treasury stock. Oct. 31 Sold the treasury shares purchased on February 28. Nov. 30 Issued 12,000 new shares. Dec. 31 Net income for 2021 is $1,494,000. 2022 Jan. 15 Declared and issued a 2-for-1 stock split. Dec. 31 Net income for 2022...

The Alford Group had 240,000 shares of common stock outstanding at January 1, 2021. The following...

The Alford Group had 240,000 shares of common stock outstanding at January 1, 2021. The following activities affected common shares during the year. There are no potential common shares outstanding. 2021 Feb. 28 Purchased 30,000 shares of treasury stock. Oct. 31 Sold the treasury shares purchased on February 28. Nov. 30 Issued 120,000 new shares. Dec. 31 Net income for 2021 is $1,495,000. 2022 Jan. 15 Declared and issued a 2-for-1 stock split. Dec. 31 Net income for 2022 is...

The Alford Group had 260,000 shares of common stock outstanding at January 1, 2021. The following...

The Alford Group had 260,000 shares of common stock outstanding at January 1, 2021. The following activities affected common shares during the year. There are no potential common shares outstanding. 2021 Feb. 28 Purchased 6,000 shares of treasury stock. Oct. 31 Sold the treasury shares purchased on February 28. Nov. 30 Issued 24,000 new shares. Dec. 31 Net income for 2021 is $1,419,000. 2022 Jan. 15 Declared and issued a 2-for-1 stock split. Dec. 31 Net income for 2022...

On January 1, 2018, Algerian Delivery had 100,000 shares of common stock outstanding. The following transactions...

On January 1, 2018, Algerian Delivery had 100,000 shares of common stock outstanding. The following transactions occurred during 2018: March 1: Reacquired 3,500 shares, accounted for as treasury stock. September 30: Sold all the treasury shares. December 1: Sold 12,500 new shares for cash. December 31: Reported a net income of $302,750. What is Algerian Deliverys earnings per share for the year ending in December 31,2018

On January 1, 2018, Coronado Corp. had 491,000 shares of common stock outstanding. During 2018, it...

On January 1, 2018, Coronado Corp. had 491,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account. February 1 Issued 114,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 103,000 shares of treasury stock June 1 Issued a 3-for-1 stock split October 1 Reissued 60,000 shares of treasury stock Determine the weighted-average number of shares outstanding as of December 31, 2018.

On January 1, 2018, Coronado Corp. had 491,000 shares of common stock outstanding. During 2018, it...

On January 1, 2018, Coronado Corp. had 491,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account. February 1 Issued 114,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 103,000 shares of treasury stock June 1 Issued a 3-for-1 stock split October 1 Reissued 60,000 shares of treasury stock a. Determine the weighted-average number of shares outstanding as of December 31, 2018. b. Assume that Coronado Corp. earned...

) On January 1, 2018, Swifty Corp. had 463,000 shares of common stock outstanding. During 2018,...

) On January 1, 2018, Swifty Corp. had 463,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account. February 1 Issued 118,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 103,000 shares of treasury stock June 1 Issued a 3-for-1 stock split October 1 Reissued 63,000 shares of treasury stock Collapse question part (a) Determine the weighted-average number of shares outstanding as of December 31, 2018. The weighted-average...

On January 1, 2018, Ivanhoe Corp. had 482,000 shares of common stock outstanding. During 2018, it...

On January 1, 2018, Ivanhoe Corp. had 482,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account. February 1 Issued 126,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 104,000 shares of treasury stock June 1 Issued a 3-for-1 stock split October 1 Reissued 61,000 shares of treasury stock Part 1 Determine the weighted-average number of shares outstanding as of December 31, 2018. The weighted-average number of shares...

On January 1, 2018, Oriole Corp. had 459,000 shares of common stock outstanding. During 2018, it...

On January 1, 2018, Oriole Corp. had 459,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account. February 1 Issued 126,000 shares March 1 Issued a 10% stock dividend May 1 Acquired 101,000 shares of treasury stock June 1 Issued a 3-for-1 stock split October 1 Reissued 62,000 shares of treasury stock Determine the weighted-average number of shares outstanding as of December 31, 2018. The weighted-average number of shares outstanding Assume...

On January 1, 2018, R Corp. had 480000 shares of common stock outstanding. During 2018, the...

On January 1, 2018, R Corp. had 480000 shares of common stock outstanding. During 2018, the following transactions affected the common stock account: 2/1/208 issued 120000 shares. 5/1/208 acquired 100000 shares of treasury stock. 6/1/2018 issued a 3-for-1 stock split. 10/1/2018 reissued 60000 shares of treasury stock ( not adjusted for dividend or split). a) Determine the weighted-average number of shares outstanding as of December 31, 2018. b) Assume that Wilke Corp. earned net income of $3456000 during 2018, determine...

Subjects