Question

At December 31, 2017, the records of Kozmetsky Corporation provided the following selected and incomplete data: Common shares: no changes during 2017 Shares authorized: 5, 000, 000. Shares issued Net income for 2017: $4, 800, 000 Common Shares account: $1, 500, 000 Dividends declared and paid during 2017 $2 per share Retained Earnings balance, January 1 2017: $82, 900, 000 : issue price $1 per share Required: Complete the following: (Round "Earnings per share" to 2 decimal places.) 1. Shares issued Shares outstandiing 2. Earnings per share 3.Total dividends paid on common shares during 2017

Answer 1

1 Shares issued Shares Outstanding 2 Earnings per share 3 Total Dividend paid on common shares during 2017 1,500,000 1,500,000 3.20 3,000,000 $ $ Working Notes: 1 Shares issued = $1,500,000/$1 = 1,500,000 Shares issued = Shares outstanding because there is no transaction occurred in relating to purchase and newly issued shares. 2 Earnings per share = Net Income / no of outstanding shares = $4,800,000/1,500,000 = $3.20 3 Total dividend paid on common shares = 1,500,000*$2 = $3,000,000