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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.

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
    =$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


Learn more about this topic:

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How to Calculate Earnings Per Share: Definition & Formula

from Introduction to Business: Homework Help Resource

Chapter 24 / Lesson 14
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