Question

9. HW11#9: GLOSSARY p. 65 Using your mobile device: Select the group of publicly held going concern corporations actively trading on a stock exchange. A) Duke Energy and Facebook and Goodwill. B) Time Warner and GrubHub and Blockbuster. C) Kroger Company and Mattel and Revlon. D) Home Depot and Salvation Army and Tootsie Roll. 10. HW11# 10 : RATIO ANALYSIS: Franklin Life Insurance Company reported net income $5,000, cash $15,000, total cash dividends $1,300 (preferred stock of $500 and common stock at $800), net cash from operating activities $7,000, and common shares outstanding at beginning and ending of 2018 of 8,000 and 10,000, respectively. Instructions: Compute Earnings Per Share. A) $0.55 B) $0.45 C) $0.25 D) $0.50

Answer 1

9. The group of ‘Kroger Company and Mattel and Revlon’ are publicly held going concern corporations actively traded on a stock exchange as all these corporations are currently traded on a New York Stock Exchange and all three are going concerns.

10. Earnings per share is the portion of a company's profit that is allocated to each outstanding share of its common stock. It is calculated by taking the difference between a company's net income and dividends paid for preferred stock and then dividing that figure by the average number of shares outstanding.

Difference between a company's net income and dividends paid for preferred stock = $5,000-$500

=$4,500

Average number of shares outstanding = ($8,000+$10,000)/2 =$9,000

Earnings per share = $4,500/$9,000 = $0.50 per share