Problem 2-17 Earnings per share and retained earnings [LO1, 3] Quantum Technolog
ID: 2377449 • Letter: P
Question
Problem 2-17 Earnings per share and retained earnings [LO1, 3]
Quantum Technology had $640,000 of retained earnings on December 31, 2010. The company paid common dividends of $30,000 in 2010 and had retained earnings of $500,000 on December 31, 2009.
How much did Quantum Technology earn during 2010? (Omit the "$" sign in your response.)
What would earnings per share be if 40,000 shares of common stock were outstanding? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Quantum Technology had $640,000 of retained earnings on December 31, 2010. The company paid common dividends of $30,000 in 2010 and had retained earnings of $500,000 on December 31, 2009.
Explanation / Answer
Quantum Technology
Retained earnings, December 31, 2010............ $ 640,000
Less: Retained earnings, December 31, 2009.. 500,000
Change in retained earnings ....................... $ 140,000
Add: Common stock dividends......................... 30,000
Earnings available to common stockholders.... $ 170,000
Earnings per share = 170,000/40,000 = $4.25 per share
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