Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. ringmeup, inc., had net income of $137,200 for the

Ringmeup, Inc., had net income of $137,200 for the year ended December 31, 2016. At the...

Free

80.2K

Verified Solution

Question

Accounting

Ringmeup, Inc., had net income of $137,200 for the year endedDecember 31, 2016. At the beginning of the year, 39,000 shares ofcommon stock were outstanding. On May 1, an additional 16,000shares were issued. On December 1, the company purchased 4,700shares of its own common stock and held them as treasury stockuntil the end of the year. No other changes in common sharesoutstanding occurred during the year. During the year, Ringmeup,Inc., paid the annual dividend on the 9,000 shares of 3.65%, $100par value preferred stock that were outstanding the entireyear.

Required:

Calculate basic earnings per share of common stock for the yearended December 31, 2016

Answer & Explanation Solved by verified expert
4.2 Ratings (850 Votes)

Computation of weighted number of shares:
weighting factor (number of months / total months) weighted number of shares
opening outstanding 39,000 12/12                          39,000.00
additional shares 16,000 08/12                          10,666.67
treasury stock -4700 01/12                              (391.67)
Total weighted shares                          49,275.00
Computation of Basic Earnig Per Share
Net income $137,200
Less: preference dividend (9000 * $100 *3.65%) ($32,850)
net income available for common shares $104,350
basic earnings per share (net income availabe / weighted number of shares) ($104350 /49275) $2.12

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Geometry
1.2K views

Geom Unit 48 CFA 22 23 Sadat Nazhat Use the right circular cone to Which...

Finance
1.2K views

Problem 18-01 Profit or Loss on New Stock Issue Security Brokers Inc. specializes in underwriting new...

Mechanical Engineering
1.2K views

Compare and differentiate between metal matrix composite and metal alloys in term of structure, properties and applications.(6marks)

Physics
1.2K views

A 1.00-cm-high object is placed 3.95 cm to the left of a converging lens of focal...

General Management
1.2K views

Problem-Solving Case: Motivating Employees at Nucor Corporation Today Nucor Corporation is the largest producer of steel in...

Biology
1.2K views

Look at the position time graph of a vehicle shown below 20 Position m 15...

Biology
1.2K views

A tree like diagram that shows related organisms that descended from a common ancestor

Algebra
1.2K views

Classify the polynomial by its degree and number of terms

Accounting
1.2K views

Please help me with this problem, thank you! ...

Accounting
1.2K views

Briefly define and discuss the significance of the following concepts: Benchmarking Flexible Budget...

Accounting
1.2K views

For each of the following independent cases ( A through E), compute the missing values...

Accounting
1.2K views

The trial balance of Swifty Ltd. at December 31, 2020, follows: ...