The parent company of SPI-K, ABCd Group Inc. reported the following information in its financial statements for the quarter ended June 30, 2021. March 31, 2021 June 30, 2021 Common Shares 100,000 100,000 Contributed Surplus 15,000 15,000 Retained Earnings 45,000 45,000 Total Shareholder Equity 160,000 160,000 Net Income for June 30, 2021 was $5,000 and dividends declared and paid was $5,000. Required: Calculate EPS and ROE for June 30, 2021. Assume that ABCd Group Inc. repurchases 10,000 of its common shares at a price of $5 per share on July 1, 2021. The company had a net income of $5,000 and declared and paid a dividend of $5,000 for the quarter ending September 30, 2021. Calculate EPS and ROE for September 30, 2021. Now compare the calculations for EPS and ROE for June 30, 2021, and September 30, 2021, and determine what the impact was on the repurchase of shares.?
The parent company of SPI-K, ABCd Group Inc. reported the following information in its financial statements for the quarter ended June 30, 2021. March 31, 2021 June 30, 2021 Common Shares 100,000 100,000 Contributed Surplus 15,000 15,000 Retained Earnings 45,000 45,000 Total Shareholder Equity 160,000 160,000 Net Income for June 30, 2021 was $5,000 and dividends declared and paid was $5,000. Required: Calculate EPS and ROE for June 30, 2021. Assume that ABCd Group Inc. repurchases 10,000 of its common shares at a price of $5 per share on July 1, 2021. The company had a net income of $5,000 and declared and paid a dividend of $5,000 for the quarter ending September 30, 2021. Calculate EPS and ROE for September 30, 2021. Now compare the calculations for EPS and ROE for June 30, 2021, and September 30, 2021, and determine what the impact was on the repurchase of shares.?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 18P
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Question
The parent company of SPI-K, ABCd Group Inc. reported the following information in its financial statements for the quarter ended June 30, 2021.
|
|
March 31, 2021 |
June 30, 2021 |
|
Common Shares |
100,000 |
100,000 |
|
Contributed Surplus |
15,000 |
15,000 |
|
|
45,000 |
45,000 |
|
Total Shareholder Equity |
160,000 |
160,000 |
Net Income for June 30, 2021 was $5,000 and dividends declared and paid was $5,000.
Required:
- Calculate EPS and ROE for June 30, 2021.
- Assume that ABCd Group Inc. repurchases 10,000 of its common shares at a price of $5 per share on July 1, 2021. The company had a net income of $5,000 and declared and paid a dividend of $5,000 for the quarter ending September 30, 2021. Calculate EPS and ROE for September 30, 2021.
- Now compare the calculations for EPS and ROE for June 30, 2021, and September 30, 2021, and determine what the impact was on the repurchase of shares.?
* Explain in Full detail.
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