Question

Blossom Corporation had 120,000 common shares outstanding on December 31, 2016. During 2017, the company issued...

Blossom Corporation had 120,000 common shares outstanding on December 31, 2016. During 2017, the company issued 14,500 shares on March 1, retired 4,100 shares on July 1, issued a 20% stock dividend on October 1, and issued 21,600 shares on December 1. For 2017, the company reported net income of $480,000 after a loss from discontinued operations of $68,800 (net of tax). The company issued a 2-for-1 stock split on February 1, 2018, and the company’s financial statements for the year ended December 31, 2017, were issued on February 28, 2018. Calculate earnings per share for 2017 as it should be reported to shareholders.

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Answer #1
Share Outstanding As of December 31,2016 120000
Share Issued as of March 1, 2017 14500
Total Share Oustanding as of March 1, 2017 134500
Retired Shares as of July 1, 2017 4100
Total Share Oustanding as of July 1, 2017 130400
20% Stock Dividend ( 130400*20%) as of Oct 1, 2017 26080
Total Share Oustanding as of Oct 1, 2017 156480
Shared Issued as of December 1 21600
Total Share Outstanding as of December 1 178080
Net Income Reported 480000
Earning Per Share ( Net Income Reported/Total Share Outstanding as of Dec 1 ) 480000/178080
EPS= 2.70
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