Question

On January 1, 2018, Oriole Corp. had 461,000 shares of common stock outstanding. During 2018, it had the following transactions that affected the Common Stock account.

February 1		Issued 124,000 shares
March 1		Issued a 10% stock dividend
May 1		Acquired 104,000 shares of treasury stock
June 1		Issued a 3-for-1 stock split
October 1		Reissued 61,000 shares of treasury stock

The weighted-average number of shares outstanding: 1703650

Assume that Oriole Corp. earned net income of $3,325,000 during 2018. In addition, it had 102,000 shares of 10%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2018. Compute earnings per share for 2018, using the weighted-average number of shares determined in part (a). (Round answer to 2 decimal places, e.g. $2.55.)

Answer 1

Earnings per share for 2018: Earnings per share = (Net income - Preferred dividends) /Weighted average number of shares outstanding = ($3,325,000 - $0)/1,703,650 $1.95