Answered: a. What amount of net income for 2013…

a. What amount of net income for 2013 will be reported in Gluco's 2014 annual report? b. Calculate Gluco's earnings per share for 2013 that would have been reported in the 2013 annual report.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter17: Financial Statement Analysis

Section: Chapter Questions

Problem 17E

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Question

During the year ended December 31, 2014, Gluco, Inc., split its stock on a 3-for-1 basis. In its annual report for 2013, the firm reported net income of $7,407,840 for 2013, with an average 1,073,600 shares of common stock outstanding for that year. There is no preferred stock.

a. What amount of net income for 2013 will be reported in Gluco's 2014 annual report?

b. Calculate Gluco's earnings per share for 2013 that would have been reported in the 2013 annual report.

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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