Exercise 1617 Culver Company had 186000 shares of common sto

Exercise 16-17 Culver Company had 186,000 shares of common stock outstanding on December 31, 2018. During the year 2019, the company issued 8,000 shares on May 1 and retired 14,000 shares on October 31. For the year 2019, Culver Company reported net income of $228,900 after a loss from discontinued operations of $39,200 (net of tax) What earnings per share data should be reported at the bottom of its income statement? (Round answers to 2 decimal places, e.g. $2.55.) Culver Company Income Statement

Solution

When calculating EPS , we have to calculate it for continuing operations only, so in the first case, Outstanding Shares of CUlver COmpany as at the end of year 2019 will be 186000+8000-14000 = 180000 shares

CUlver Company income statement

Income of Culver company for year 2019 after setting off loss from discontinued operations $ 2,28,900

No. of outstanding shares for the year 2019 1,80,000

Earnings per share for the year 2019 $1.272