Ask Question
8 March, 22:16

For the year ended December 31, 2021, Norstar Industries reported net income of $975,000. At January 1, 2021, the company had 1,110,000 common shares outstanding. The following changes in the number of shares occurred during 2021: Apr. 30 Sold 95,000 shares in a public offering. May 24 Declared and distributed a 5% stock dividend. June 1 Issued 108,000 shares as part of the consideration for the purchase of assets from a subsidiary. Required: Compute Norstar's earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Round "EPS" answer to 2 decimal places. Do not round intermediate calculations.)

+3
Answers (1)
  1. 9 March, 00:49
    0
    EPS as at 31 Dec 2012 is $0.71

    Explanation:

    The common shares outstanding as at 31st December 2021 is equal to:

    Opening outstanding share of the year 2021 + Issuance of share in Apr. 30.2021 + Stock distributed as dividend at May. 24.2021 + Issuance of stock in June. 1.2021

    in which:

    Opening outstanding share of the year 2021 = 1,110,000

    Issuance of share in Apr. 30.2021 = 95,000

    Stock distributed as dividend at May. 24.2021 = Stock outstanding at May. 24 x 5% = (1,110,000 + 95,000) x 5% = 60,250

    Issuance of stock in June. 1.2021 = 108,000

    => The common shares outstanding as at 31st December 2021 = 1,373,250

    => EPS = 975,000/1,373,250 = $0.71
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “For the year ended December 31, 2021, Norstar Industries reported net income of $975,000. At January 1, 2021, the company had 1,110,000 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers