Earnings per ShareThe 2018 balance sheet for Guthrie Corporation revealed the following information: Common stock, $10 par, 50,000 shares issued and outstandingPreferred stock, $100 par, 6%, cumulative stock, 1,000 shares issued and outstandingDuring 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. Round your answer to the nearest whole number.shares3. Compute the basic EPS that would be disclosed by Guthrie. Round your answer to 2 decimal places.Basic EPS $

Basic EPS (Earnings per share) states the investors how much of the net income of the firm was…

Answered: he 2018 balance sheet for Guthrie…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Earnings per Share

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. Round your answer to the nearest whole number.
shares

3. Compute the basic EPS that would be disclosed by Guthrie. Round your answer to 2 decimal places.
Basic EPS $

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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