The 2018 balance sheet for Guthrie Corporation revealed the following information: Common stock, $10 par, 50,000

Question:

The 2018 balance sheet for Guthrie Corporation revealed the following information:
• Common stock, $10 par, 50,000 shares issued and outstanding
• Preferred stock, $100 par, 6%, cumulative stock, 1,000 shares issued and outstanding
During 2019, Guthrie reported net income of $225,000 and engaged in the following stock transactions:
Mar. 1 Issued 10,000 shares of common stock for cash.
Apr. 1 Reacquired 2,000 shares of common stock as treasury stock.
Aug. 1 Resold 1,000 shares of treasury stock for cash.
Sept. 1 Declared and issued a 50% stock dividend on common stock.

Required:
1. Determine if Guthrie has a simple or complex capital structure.
2. Calculate the weighted average number of shares of stock that should be used to calculate EPS for the 2019 income statement.
3. Compute the basic EPS that would be disclosed by Guthrie.

Common Stock
Common 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... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...

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