Markus Company's common stock sold for $3.50 per share at the end of this year.

The company paid a common stock dividend of $0.63 per share this year.

It also provided the following data excerpts from this year's financial statements:

Ending Balance Beginning Balance Cash $ 35,000 $ 34,000 Accounts receivable $ 70,000 $ 55,000 Inventory $ 60,700 $ 70,000 Current assets $ 165,700 $ 159,000 Total assets $ 557,000 $ 586,800 Current liabilities $ 67,500 $ 55,500 Total liabilities $ 152,000 $ 136,800 Common stock, $1 par value $ 133,000 $ 133,000 Total stockholders' equity $ 405,000 $ 450,000 Total liabilities and stockholders' equity $ 557,000 $ 586,800 This Year Sales (all on account) $ 825,000 Cost of goods sold $ 478,500 Gross margin $ 346,500 Net operating income $ 194,250 Interest expense $ 10,500 Net income $ 128,625 rev: 05_25_2017_QC_CS-89969

What is the earnings per share? (Round your answer to 2 decimal places.)

Question

Business

Cristina Hensley

17 April, 00:03

Markus Company's common stock sold for $3.50 per share at the end of this year.

The company paid a common stock dividend of $0.63 per share this year.

It also provided the following data excerpts from this year's financial statements:

Ending Balance Beginning Balance Cash $ 35,000 $ 34,000 Accounts receivable $ 70,000 $ 55,000 Inventory $ 60,700 $ 70,000 Current assets $ 165,700 $ 159,000 Total assets $ 557,000 $ 586,800 Current liabilities $ 67,500 $ 55,500 Total liabilities $ 152,000 $ 136,800 Common stock, $1 par value $ 133,000 $ 133,000 Total stockholders' equity $ 405,000 $ 450,000 Total liabilities and stockholders' equity $ 557,000 $ 586,800 This Year Sales (all on account) $ 825,000 Cost of goods sold $ 478,500 Gross margin $ 346,500 Net operating income $ 194,250 Interest expense $ 10,500 Net income $ 128,625 rev: 05_25_2017_QC_CS-89969

What is the earnings per share? (Round your answer to 2 decimal places.)

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Answers (1)

Know the Answer?

Braxton Fry · Answer 1

The Earnings per share of Markus Company is $0.97.

Explanation:

We have the Earning per share of Markus Company = The firm's net income / The firm's weighted average share outstanding

in which:

Net income is given at $128,625

Share outstanding is the same at the beginning and the ending of the year, so weighted average share outstanding is calculated as: Common stock account balance / par value = 133,000/1 = 133,000 shares outstanding.

So, Earning per share = Net income / Weighted average share outstanding = 128,625/133,000 = $0.97 (Round your answer to 2 decimal places).