Earnings per ShareThe 2018 balance sheet for Guthrie Corporation revealed the following information: Common stock, $10 par, 50,000 shares issued and outstandingPreferred stock, $100 par, 6%, cumulative stock, 1,000 shares issued and outstandingDuring 2019, Guthrie reported net income of $225,000 and engaged in the following stock transactions: Mar. 1 Issued 10,000 shares of common stock for cash.Apr. 1 Reacquired 2,000 shares of common stock as treasury stock.Aug. 1 Resold 1,000 shares of treasury stock for cash.Sept. 1 Declared and issued a 50% stock dividend on common stock. Required:1. Determine if Guthrie has a simple or complex capital structure. 2. Calculate the weighted average number of shares of stock that should be used to calculate EPS for the 2019 income statement. Round your answer to the nearest whole number.shares3. Compute the basic EPS that would be disclosed by Guthrie. Round your answer to 2 decimal places.Basic EPS $

Basic EPS (Earnings per share) states the investors how much of the net income of the firm was…

Answered: he 2018 balance sheet for Guthrie…

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 19E: Lyon Company shows the following condensed income statement information for the year ended December...

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Earnings per Share

The 2018 balance sheet for Guthrie Corporation revealed the following information:

Common stock, $10 par, 50,000 shares issued and outstanding
Preferred stock, $100 par, 6%, cumulative stock, 1,000 shares issued and outstanding

During 2019, Guthrie reported net income of $225,000 and engaged in the following stock transactions:

Mar. 1		Issued 10,000 shares of common stock for cash.
Apr. 1		Reacquired 2,000 shares of common stock as treasury stock.
Aug. 1		Resold 1,000 shares of treasury stock for cash.
Sept. 1		Declared and issued a 50% stock dividend on common stock.

Required:

1. Determine if Guthrie has a simple or complex capital structure.

2. Calculate the weighted average number of shares of stock that should be used to calculate EPS for the 2019 income statement. Round your answer to the nearest whole number.
shares

3. Compute the basic EPS that would be disclosed by Guthrie. Round your answer to 2 decimal places.
Basic EPS $

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