M HAN 7: Share based comp × \\ e solved: The Alford Grou/X ctoNot secure lezto.m

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M HAN 7: Share based comp × e solved: The Alford Grou/X ctoNot secure lezto.mheducation.com/hm.tpx : Apps Syracuse University University of Michiga university of North C University ofTexas l Lockheed App M McGraw-Hill Connect My Binghamton 1 Handshake Indeed The Alford Group had 202,000 shares of common stock outstanding at January 1, 2016. The following activities affected common shares during the year. There are no potential common shares outstanding. 2016 Feb. 28 Purchased 6,000 shares of treasury stock Oc1. 31 Sold the treasury shares purchased on February 28 Nov 30 Issued 24,000 new shares Dec. 31 Net income for 2016 is $400,000 2017 Jan. 15 Declared and issued a 2-for-1 stock split Dec. 31 Net income for 2017 is $400,000 Required: 1. Determine the 2016 EP3. (Enter your answers in thousands.) s per 2. Determine the 2017 EP3. (Enter your answers in thousands.) nings per 3. At what amount will the 2016 EPS be presented in the 2017 comparative financial statements? (Ente 3-24 PM 11/18/2017

Explanation / Answer

CALCULATION OF NUMBER OF SHARES OUTSTANDING   IN 2016 Year 2016 January 01 2016 Opening shares           2,02,000.00 Shares Less : 'Feb 28 Purchase of Treasury Stock               -6,000.00 Shares Add: Oct 31 Sale of tReasury Stock                 6,000.00 Shares Add: Nov -30 Issued new 24000 shares              24,000.00 Shares Totak Shares outstanding           2,26,000.00 Shares CALCULATION OF NUMBER OF SHARES OUTSTANDING   IN 2016 Year 2017 Opening Common Stock Outstanding                   2,26,000 Shares Stock split 2 for 1 shares =                 1,13,000 Shares Toal Shares                 3,39,000 Shares CALCULATION OF EARNING PER SHARES FOR THE YEAR 2016 Year 2016 Year 2016 (in Thousans) Net Income = $            4,00,000                   400.00 Divide By   "/" Number of shares outstanding =                 2,26,000                   226.00 Earning per shares = $                     1.77 $                   1.77 CALCULATION OF EARNING PER SHARES FOR THE YEAR 2017 Year 2017 Year 2017 (in Thousans) Net Income = $            4,00,000                   400.00 Divide By   "/" Number of shares outstanding =                 3,39,000                   339.00 Earning per shares = $                     1.18 $                   1.18 PRESENTATION OF EARNING PER SHARE IN FINANCIAL STATEMENT IN 2017                   2,017.00               2,016.00 Earning Per shares $                     1.18 $                   1.77

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