Earnings per share (EPS) : The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS). Use the following formula to compute EPS: EPS = Net income – Preferred dividends Weighted average common shares outstanding To compute : (a) EPS of Company CG for 2016 and 2017.

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Answer 1

Question

Chapter 2, Problem 2.7E

(a)

To determine

Earnings per share (EPS): The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS).

Use the following formula to compute EPS:

EPS = Net income – Preferred dividendsWeighted average common shares outstanding

To compute: (a) EPS of Company CG for 2016 and 2017.

(b)

To determine

To compute: (b) comment on the changes.

(c)

To determine

To compute: (c) finds how the answer computed in part (a) changes if dividends were paid.

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Rudolph Corporation showed retained earnings of $400,000 on its balance sheet for 2016. In 2017, the company’s earnings per share (EPS) were $3.00 and its dividends paid per share (DPS) were $1.00. The company has 200,000 shares of stock outstanding. What will be the level of retained earnings on the company’s 2017 balance sheet?

Suppose the following information is available for Callaway Golf Company for the years 2018 and 2017. (Dollars are in thousands, except share information.) 2018 2017 Net sales $1,117,204 $1,124,591 Net income (loss) 66,176 54,587 Total assets 855,338 838,078 Share information 2018 2017 Shares outstanding at year-end 64,507,000 66,282,000 Preferred dividends -0- -0- There were 73,139,000 shares outstanding at the end of 2016. Instructions (a) What was the company's earnings per share for each year? (b) Based on your findings above, how did the company's profitability change from 2017 to 2018? (c) Suppose the company had paid dividends on preferred stock and on common stock during the year. How would this affect your calculation in part (a)?

Listed are the equity sections of balance sheets for years 2014 and 2015 as reported by Mountain Air Ski Resorts, Inc. The overall value of stockholders' equity has risen from $1,800,000 to $6,600,000. Use the statements to discover how and why this happened. The company paid total dividends of $210,000 during fiscal 2015. a. What was Mountain Air's net income for fiscal 2015? b. How many new shares did the corporation issue and sell during the year? c. At what average price per share did the new stock sold during 2015 sell? d. At what price per share did Mountain Air's original 420,000 shares sell?

Answer 2

Question

Chapter 2, Problem 2.7E

(a)

To determine

Earnings per share (EPS): The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS).

Use the following formula to compute EPS:

EPS = Net income – Preferred dividendsWeighted average common shares outstanding

To compute: (a) EPS of Company CG for 2016 and 2017.

(b)

To determine

To compute: (b) comment on the changes.

(c)

To determine

To compute: (c) finds how the answer computed in part (a) changes if dividends were paid.

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Answer 3

Question

Chapter 2, Problem 2.7E

(a)

To determine

Earnings per share (EPS): The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS).

Use the following formula to compute EPS:

EPS = Net income – Preferred dividendsWeighted average common shares outstanding

To compute: (a) EPS of Company CG for 2016 and 2017.

(b)

To determine

To compute: (b) comment on the changes.

(c)

To determine

To compute: (c) finds how the answer computed in part (a) changes if dividends were paid.

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Answer 4

Question

Chapter 2, Problem 2.7E

(a)

To determine

Earnings per share (EPS): The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS).

Use the following formula to compute EPS:

EPS = Net income – Preferred dividendsWeighted average common shares outstanding

To compute: (a) EPS of Company CG for 2016 and 2017.

(b)

To determine

To compute: (b) comment on the changes.

(c)

To determine

To compute: (c) finds how the answer computed in part (a) changes if dividends were paid.

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Answer 5

Chapter 2, Problem 2.7E

(a)

To determine

Earnings per share (EPS): The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS).

Use the following formula to compute EPS:

EPS = Net income – Preferred dividendsWeighted average common shares outstanding

To compute: (a) EPS of Company CG for 2016 and 2017.

(b)

To determine

To compute: (b) comment on the changes.

(c)

To determine

To compute: (c) finds how the answer computed in part (a) changes if dividends were paid.

Answer 6

Chapter 2, Problem 2.7E

(a)

To determine

Earnings per share (EPS): The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS).

Use the following formula to compute EPS:

EPS = Net income – Preferred dividendsWeighted average common shares outstanding

To compute: (a) EPS of Company CG for 2016 and 2017.

Answer 7

Chapter 2, Problem 2.7E

(a)

To determine

Earnings per share (EPS): The amount of net income available to each shareholder per common share outstanding is referred to as earnings per share (EPS).

Use the following formula to compute EPS:

EPS = Net income – Preferred dividendsWeighted average common shares outstanding

To compute: (a) EPS of Company CG for 2016 and 2017.

Answer 8

(b)

To determine

To compute: (b) comment on the changes.

Answer 9

(b)

To determine

To compute: (b) comment on the changes.

Answer 10

(c)

To determine

To compute: (c) finds how the answer computed in part (a) changes if dividends were paid.

Answer 11

(c)

To determine

To compute: (c) finds how the answer computed in part (a) changes if dividends were paid.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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Solution Summary: The author explains how to compute earnings per share (EPS) of Company CG for 2016 and 2017, if net income is 54,587,000, preferred dividends are 0, and common shares outstanding at the beginning of 2016 are

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To compute: (b) comment on the changes.

To compute: (c) finds how the answer computed in part (a) changes if dividends were paid.

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