Below is select information from VC United income statement.
At the end of Year 1, the weighted average number of common shares outstanding was 140,000.
Income Statement, End of Year 1
Cost of goods sold $816,000
Operating expenses $96,000
Tax expense $23,000
Calculate earnings per share for VC United.
Earnings Per Share:
The amount of after-tax income available per share to the shareholders is the earning per share. The earnings per share can be calculated simply by dividing net income earned in a given accounting period by the total number of shares outstanding during the same period.
Answer and Explanation:
The net income will be calculated for VC United
- Net Income = Sales - Cost of goods sold - Operating Expense - Tax Expense
= $1,022,000 - $816,000 - $96,000 - $23,000
The earnings per share for VC United are calculated as under
- The net income is $87,000
- The weighted average number of common shares outstanding was 140,000
- The earnings per share will be calculated by using the formula below
- Earning per share = Net income / Number of outstanding shares
= $87,000 / 140,000
The earnings per share for VC United is $0.62
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Introduction to Business: Homework Help ResourceChapter 24 / Lesson 14