Respuesta :
Answer: (a) Earning per share in 2016: 0.85
(b) Earning per share in 2017: 1.4
Explanation:
Earning per share in 2016:
Net income (loss) = $61,030,000
Opening shares = 74,400,000
Ending shares = 69,200,000
Average no. of shares O/S = [tex]\frac{74,400,000+69,200,000}{2}[/tex]
= 71,800,000
Earning per share = [tex]\frac{Net\ Income}{Average\ no.\ of\ shares\ o/s}[/tex]
= [tex]\frac{61,030,000}{71,800,000}[/tex]
= 0.85
Earning per share in 2017:
Net income (loss) = $91,420,000
Opening shares = 69,200,000
Ending shares = 61,400,000
Average no. of shares O/S = [tex]\frac{69,200,000+61,400,000}{2}[/tex]
= 65,300,000
Earning per share = [tex]\frac{Net\ Income}{Average\ no.\ of\ shares\ o/s}[/tex]
= [tex]\frac{91,420,000}{65,300,000}[/tex]
= 1.4
The company’s earnings per share for each year will be 0.85 and 1.4.
The average number of shares will be the average of the opening and ending shares. This will be:
= (74400000 + 69200000) / 2
= 71800000
Earnings per share will be:
= Net income / Average number of shares
= 61030000/71800000
= 0.85
In 2017, the average number of shares will be:
= (69200000 + 61400000) /2
= 65300000
Earnings per share will be:
= 91420000 / 65300000
= 1.4
Therefore, the company’s earnings per share for each year will be 0.85 and 1.4.
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