# Below is select information from VC United income statement. At the end of Year 1, the weighted...

## Question:

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

Sales $1,022,000 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.

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
=$87,000 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 =$0.62

The earnings per share for VC United is \$0.62