Computing Earnings per Share The income statement, statement of retained earnings, and balance sheet for Jeanette Company are as follows: Jeanette Company Income Statement For the Year Ended December 31, 20X2 Amount Percent Net sales $8,281,989 100.0% Less: Cost of goods sold (5,383,293) 65.0 Gross margin $2,898,696 35.0 Less: Operating expenses (1,323,368) 16.0 Operating income $1,575,328 19.0 Less: Interest expense (50,000) 0.6 Income before taxes $1,525,328 18.4 Less: Income taxes (40%)* (610,131) 7.4 Net income $915,197 11.0 * Includes both state and federal taxes. Jeanette Company Statement of Retained Earnings For the Year Ended December 31, 20X2 Balance, beginning of period $1,979,155 Net income 915,197 Total $2,894,352 Preferred dividends (80,000) Dividends to common stockholders (201,887) Balance, end of period $2,612,465 Jeanette Company Comparative Balance Sheets At December 31, 20X1 and 20X2 20X1 20X2 Assets Current assets: Cash $2,875,000 $2,580,000 Marketable securities 800,000 700,000 Accounts receivable (net) 939,776 690,000 Inventories 490,000 260,000 Other 93,000 74,261 Total current assets $5,197,776 $4,304,261 Property and equipment: Land $1,575,000 $1,067,315 Building and equipment (net) 1,348,800 1,150,000 Total long-term assets $2,923,800 $2,217,315 Total assets $8,121,576 $6,521,576 Liabilities and Stockholders' Equity Current liabilities: Notes payable, short term $1,170,127 $ 543,641 Accounts payable 298,484 101,500 Current maturity of long-term debt 3,000 2,000 Accrued payables 200,000 57,780 Total current liabilities $1,671,611 $ 704,921 Long-term liabilities: Bonds payable, 10% 500,000 500,000 Total liabilities $2,171,611 $1,204,921 Stockholders' equity: Preferred stock, $25 par, 8% $1,000,000 $1,000,000 Common stock, $0.70 par 337,500 337,500 Additional paid-in capital* 2,000,000 2,000,000 Retained earnings 2,612,465 1,979,155 Total stockholders' equity $5,949,965 $5,316,655 Total liabilities and stockholders' equity $8,121,576 $6,521,576 * For common stock only. Required: 1. Compute the number of common shares. Round your answer to the nearest dollar. fill in the blank 1 shares 2. Compute earnings per share. Round your answer to the nearest cent. $fill in the blank 2 per share
Computing Earnings per Share The income statement, statement of retained earnings, and balance sheet for Jeanette Company are as follows: Jeanette Company Income Statement For the Year Ended December 31, 20X2 Amount Percent Net sales $8,281,989 100.0% Less: Cost of goods sold (5,383,293) 65.0 Gross margin $2,898,696 35.0 Less: Operating expenses (1,323,368) 16.0 Operating income $1,575,328 19.0 Less: Interest expense (50,000) 0.6 Income before taxes $1,525,328 18.4 Less: Income taxes (40%)* (610,131) 7.4 Net income $915,197 11.0 * Includes both state and federal taxes. Jeanette Company Statement of Retained Earnings For the Year Ended December 31, 20X2 Balance, beginning of period $1,979,155 Net income 915,197 Total $2,894,352 Preferred dividends (80,000) Dividends to common stockholders (201,887) Balance, end of period $2,612,465 Jeanette Company Comparative Balance Sheets At December 31, 20X1 and 20X2 20X1 20X2 Assets Current assets: Cash $2,875,000 $2,580,000 Marketable securities 800,000 700,000 Accounts receivable (net) 939,776 690,000 Inventories 490,000 260,000 Other 93,000 74,261 Total current assets $5,197,776 $4,304,261 Property and equipment: Land $1,575,000 $1,067,315 Building and equipment (net) 1,348,800 1,150,000 Total long-term assets $2,923,800 $2,217,315 Total assets $8,121,576 $6,521,576 Liabilities and Stockholders' Equity Current liabilities: Notes payable, short term $1,170,127 $ 543,641 Accounts payable 298,484 101,500 Current maturity of long-term debt 3,000 2,000 Accrued payables 200,000 57,780 Total current liabilities $1,671,611 $ 704,921 Long-term liabilities: Bonds payable, 10% 500,000 500,000 Total liabilities $2,171,611 $1,204,921 Stockholders' equity: Preferred stock, $25 par, 8% $1,000,000 $1,000,000 Common stock, $0.70 par 337,500 337,500 Additional paid-in capital* 2,000,000 2,000,000 Retained earnings 2,612,465 1,979,155 Total stockholders' equity $5,949,965 $5,316,655 Total liabilities and stockholders' equity $8,121,576 $6,521,576 * For common stock only. Required: 1. Compute the number of common shares. Round your answer to the nearest dollar. fill in the blank 1 shares 2. Compute earnings per share. Round your answer to the nearest cent. $fill in the blank 2 per share
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 22BEA: The income statement, statement of retained earnings, and balance sheet for Somerville Company are...
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Computing Earnings per Share
The income statement, statement of
Jeanette Company Income Statement For the Year Ended December 31, 20X2 |
|||
Amount | Percent | ||
Net sales | $8,281,989 | 100.0% | |
Less: Cost of goods sold | (5,383,293) | 65.0 | |
Gross margin | $2,898,696 | 35.0 | |
Less: Operating expenses | (1,323,368) | 16.0 | |
Operating income | $1,575,328 | 19.0 | |
Less: Interest expense | (50,000) | 0.6 | |
Income before taxes | $1,525,328 | 18.4 | |
Less: Income taxes (40%)* | (610,131) | 7.4 | |
Net income | $915,197 | 11.0 | |
* Includes both state and federal taxes. |
Jeanette Company Statement of Retained Earnings For the Year Ended December 31, 20X2 |
|
Balance, beginning of period | $1,979,155 |
Net income | 915,197 |
Total | $2,894,352 |
Preferred dividends | (80,000) |
Dividends to common stockholders | (201,887) |
Balance, end of period | $2,612,465 |
Jeanette Company Comparative Balance Sheets At December 31, 20X1 and 20X2 |
|||
20X1 | 20X2 | ||
Assets | |||
Current assets: | |||
Cash | $2,875,000 | $2,580,000 | |
Marketable securities | 800,000 | 700,000 | |
939,776 | 690,000 | ||
Inventories | 490,000 | 260,000 | |
Other | 93,000 | 74,261 | |
Total current assets | $5,197,776 | $4,304,261 | |
Property and equipment: | |||
Land | $1,575,000 | $1,067,315 | |
Building and equipment (net) | 1,348,800 | 1,150,000 | |
Total long-term assets | $2,923,800 | $2,217,315 | |
Total assets | $8,121,576 | $6,521,576 | |
Liabilities and |
|||
Current liabilities: | |||
Notes payable, short term | $1,170,127 | $ 543,641 | |
Accounts payable | 298,484 | 101,500 | |
Current maturity of long-term debt | 3,000 | 2,000 | |
Accrued payables | 200,000 | 57,780 | |
Total current liabilities | $1,671,611 | $ 704,921 | |
Long-term liabilities: | |||
Bonds payable, 10% | 500,000 | 500,000 | |
Total liabilities | $2,171,611 | $1,204,921 | |
Stockholders' equity: | |||
$1,000,000 | $1,000,000 | ||
Common stock, $0.70 par | 337,500 | 337,500 | |
Additional paid-in capital* | 2,000,000 | 2,000,000 | |
Retained earnings | 2,612,465 | 1,979,155 | |
Total stockholders' equity | $5,949,965 | $5,316,655 | |
Total liabilities and stockholders' equity | $8,121,576 | $6,521,576 | |
* For common stock only. |
Required:
1. Compute the number of common shares. Round your answer to the nearest dollar.
fill in the blank 1 shares
2. Compute earnings per share. Round your answer to the nearest cent.
$fill in the blank 2 per share
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