Question
Asked Feb 6, 2020
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Grouper Inc. presented the following data.

Net income   $2,340,000
Preferred stock: 52,000 shares outstanding, $100 par, 8% cumulative, not convertible   5,200,000
Common stock: Shares outstanding 1/1   816,000
   Issued for cash, 5/1   322,800
   Acquired treasury stock for cash, 8/1   136,800
   2-for-1 stock split, 10/1    


Compute earnings per share.

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Expert Answer

Step 1

Earnings per share:

 

Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders.

Step 2

Compute earnings per share:

 

Accounting homework question answer, step 2, image 1

Step 3

Working Note (1):

 

Compute the weighted-average number of outstanding shares:

 

Accounting homework question answer, step 3, image 1

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