# On January 1, 2021, Pharoah Corp. had 491,000 shares of common stock outstanding. During 2021, it had the following transactions that affected the Common Stock account.February 1Issued 116,000 sharesMarch 1Issued a 10% stock dividendMay 1Acquired 96,000 shares of treasury stockJune 1Issued a 3-for-1 stock splitOctober 1Reissued 59,000 shares of treasury stockAssume that Pharoah Corp. earned net income of \$3,434,000 during 2021. In addition, it had 102,000 shares of 9%, \$100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2021. Compute earnings per share for 2018, using the weighted-average number of shares determined in part (a).Earnings Per Share?

Question
Asked Sep 13, 2019
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On January 1, 2021, Pharoah Corp. had 491,000 shares of common stock outstanding. During 2021, it had the following transactions that affected the Common Stock account.

February 1

Issued 116,000 shares
March 1

Issued a 10% stock dividend
May 1

Acquired 96,000 shares of treasury stock
June 1

Issued a 3-for-1 stock split
October 1

Reissued 59,000 shares of treasury stock

Assume that Pharoah Corp. earned net income of \$3,434,000 during 2021. In addition, it had 102,000 shares of 9%, \$100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2021. Compute earnings per share for 2018, using the weighted-average number of shares determined in part (a).

Earnings Per Share?

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Step 1

Earnings per share is a financial ratio that represents the value income earned for one share. The portion of company’s earning that is allocated to each share of common stock.

Formula = Income available to equity shareholders ÷ no of shares outstanding

Step 2

Computation of Weighted Average no of shares outstanding

Step 3

Working Note: F...

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