Comparative Statements of Retained Earnings for Renn-Dever Corporation were repo

Question

Comparative Statements of Retained Earnings for Renn-Dever Corporation were reported as follows for the fiscal years ending December 31, 2014, 2015, and 2016.

Compute Renn-Dever’s earnings per share as it would have appeared in income statements for the years ended December 31, 2014, 2015, and 2016. (Negative amounts should be indicated by a minus sign.)

Comparative Statements of Retained Earnings for Renn-Dever Corporation were reported as follows for the fiscal years ending December 31, 2014, 2015, and 2016.

Explanation / Answer

EARNNING PER SHARE FOR THE YEAR DECEMBER 31, 2014

NET LOSS FOR THE YEAR = -$184500

NUMBER OF COMMON STOCK = 2190000

EPS (-$184500 / 2190000) = -$0.08

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EARNNING PER SHARE FOR THE YEAR DECEMBER 31, 2015

NET INCOME FOR THE YEAR = $2420900

NUMBER OF COMMON STOCK (2190000 - 140000) = 2050000

EPS ($2420900 / 2050000) = $1.18

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EARNNING PER SHARE FOR THE YEAR DECEMBER 31, 2016

NET INCOME FOR THE YEAR = $3326700

NUMBER OF COMMON STOCK (2190000 - 140000 + 61500) = 2111500

EPS ($3326700 / 2111500) = $1.58

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