During the year ended December 31, 2011, Stickit, Inc., split its stock on a 4-f
ID: 2503361 • Letter: D
Question
During the year ended December 31, 2011, Stickit, Inc., split its stock on a 4-for-1 basis. In its annual report for 2010, the firm reported net income of $980,200 for 2010, with an average 217,800 shares of common stock outstanding for that year. There was no preferred stock.
What amount of net income for 2010 will be reported in Stickit's 2011 annual report? (Omit the "$" sign in your response.)
Calculate Stickit's earnings per share for 2010 that would have been reported in the 2010 annual report.(Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Calculate Stickit's earnings per share for 2010 that will be reported in the 2011 annual report for comparative purposes. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
During the year ended December 31, 2011, Stickit, Inc., split its stock on a 4-for-1 basis. In its annual report for 2010, the firm reported net income of $980,200 for 2010, with an average 217,800 shares of common stock outstanding for that year. There was no preferred stock.
Explanation / Answer
During the year ended December 31, 2011, Stickit, Inc., split its stock on a 4-for-1 basis. In its annual report for 2010, the firm reported net income of $980,200 for 2010, with an average 217,800 shares of common stock outstanding for that year. There was no preferred stock.
What amount of net income for 2010 will be reported in Stickit's 2011 annual report? (Omit the "$" sign in your response.)
Calculate Stickit's earnings per share for 2010 that would have been reported in the 2010 annual report.(Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Earnings per share= net income/No of shares of common stock outstanding
Earnings per share= 980200/217800
Earnings per share= 4.50
Calculate Stickit's earnings per share for 2010 that will be reported in the 2011 annual report for comparative purposes. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Restated No of shares of common stock outstanding = 217800*4 = 871200
Earnings per share= net income/Restated no of shares of common stock outstanding
Earnings per share= 980200/871200
Earnings per share= 1.125
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