Question

Mayan company had net income of $33,250. the weighted-average common shares outstanding were 9,500. the company sold 4,500 shares before the end of the year. there were no other stock transactions. the company's earnings per share is:

Answer 1

Answer : The company's earnings per share is, 3.50

Explanation :

As we are given that:

Net income = $33,250

Share outstanding = 9500

Earning per share =
`\frac{\text{Net income}}{\text{Share outstanding}}`

Earning per share =
`(33250)/(9500)`

Earning per share = 3.50 per share

Thus, the company's earnings per share is, 3.50

Answer 2

The company’s earnings per share would still be based on the common shares outstanding of 9,500. This is because the 4,500 selling transaction is not yet accounted for that last accounting period. Therefore,

Earnings per share = $33,250 / 9,500 shares

Earnings per share = $3.5 per share