During the year ended December 31, 2017, Gluco, Inc., split its stock on a 4-for

Question

During the year ended December 31, 2017, Gluco, Inc., split its stock on a 4-for-1 basis. In its annual report for 2016, the firm reported net income of $952,900 for 2016, with an average 224,700 shares of common stock outstanding for that year. There was no preferred stock. Required:

a. What amount of net income for 2016 will be reported in Gluco's 2017 annual report?

b. Calculate Gluco's earnings per share for 2016 that would have been reported in the 2016 annual report. (Round your answer to 2 decimal places.)

c. Calculate Gluco's earnings per share for 2016 that will be reported in the 2017 annual report for comparative purposes. (Round your answer to 2 decimal places.)

Explanation / Answer

a. What amount of net income for 2016 will be reported in Gluco's 2017 annual report?

Net income = 952900

b. Calculate Gluco's earnings per share for 2016 that would have been reported in the 2016 annual report. (Round your answer to 2 decimal places.)

Earning per share = 952900/224700 = 4.24 per share

c. Calculate Gluco's earnings per share for 2016 that will be reported in the 2017 annual report for comparative purposes. (Round your answer to 2 decimal places.)

share outstanding = 224700*4 = 898800

Earning per share = 952900/898800 = 1.06 per share

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