Lucas Company reports net income of $5,125 for the year ended December 31, 2013, its first year
Question:
Lucas Company reports net income of $5,125 for the year ended December 31, 2013, its first year of operations. On January 4, 2013, Lucas issued 9,000 shares of common stock. On August 2, 2013, it issued an additional 3,000 shares of stock, resulting in 12,000 shares outstanding at year-end. During 2014, Lucas earned net income of $16,400. It issued 2,000 additional shares of stock on March 3, 2014, and declared and issued a 2-for-1 stock split on November 3, 2014, resulting in 28,000 shares outstanding at year-end.
During 2015, Lucas earned net income of $23,520. The only common stock transaction during 2015 was a 20% stock dividend issued on July 2, 2015.
Required:
1. Compute the basic earnings per share that would be disclosed in the 2013 annual report.
2. Compute the 2013 and 2014 comparative basic earnings per share that would be disclosed in the 2014 annual report.
3. Compute the 2013, 2014, and 2015 comparative basic earnings per share that would be disclosed in the 2015 annual report.
Common StockCommon stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
Intermediate Accounting Reporting and Analysis
ISBN: 978-1111822361
1st edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach