Question

Comparative Statements of Retained Earnings for Renn-Dever Corporation were reported as follows for the fiscal years ending December 31, 2016, 2017, and 2018.

RENN-DEVER CORPORATION
Statements of Retained Earnings		For the Years Ended December 31
	2018			2017			2016
Balance at beginning of year	$	7,094,292		$	5,620,052		$	5,804,552
Net income (loss)		3,326,700			2,420,900			(184,500)
Deductions:
Stock dividend (61,500 shares)		260,000
Common shares retired, September 30 (140,000 shares)					230,660
Common stock cash dividends		907,950			716,000			0
Balance at end of year	$	9,253,042		$	7,094,292		$	5,620,052

At December 31, 2015, paid-in capital consisted of the following:

Common stock, 2,190,000 shares at $1 par,	$	2,190,000
Paid in capital—excess of par		7,600,000

No preferred stock or potential common shares were outstanding during any of the periods shown.

Required:
Compute Renn-Dever’s earnings per share as it would have appeared in income statements for the years ended December 31, 2016, 2017, and 2018. (Negative amounts should be indicated by a minus sign.)

	Year Numerator / Denominator = Earnings (Net Loss) per Share 2016 / = 2017 / = 2018 / =

Answer 1

Formula to calculate earnings per share
Earnings per share	Net income/No of shares outstanding
Calculation of earnings per share for 2016
Net income	-$184,500.00
No of shares outstanding	2190000
Earnings per share	-$0.08
Calculation of earnings per share for 2017
Net income	$2,420,900.00
No of shares outstanding	2050000	(2190000-140000)
Earnings per share	$1.18
Calculation of earnings per share for 2016
Net income	$3,326,700.00
No of shares outstanding	2111500	(2190000-140000+61500)
Earnings per share	$1.58
Year	Numerator	/	Denominator	=	Earnings (Net loss) per share
2016	-$184,500.00		2190000		-$0.08
2017	$2,420,900.00		2050000		$1.18
2018	$3,326,700.00		2111500		$1.58