17BP Quantum Technology had \(669,000... [FREE SOLUTION]

Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen

Business Studies

16th Edition 路 768 pages

ISBN: 9781259277160

Chapter 2: 17BP (page 51)

Quantum Technology had $669,000 of retained earnings on December 31, 20X2. The company paid common dividends of $35,500 in 20X2 and had retained earnings of $576,000 on December 31, 20X1. How much did Quantum Technology earn during 20X2, and what would earnings per share be if 47,400 shares of common stock were outstanding?

Expert verified

The net earnings of the company during 20X2 was $128,500, and the earnings per share would be $2.71.

Closing retained earning-Opening retained earning+Dividend paid

=$669,000-$576,000+35,500

=$128,500

$E P S = \frac{N e t E a r n i n g}{N o . o f s h a r e s o u t s \tan d i n g} = \frac{$ 128, 500}{47, 400} = $ 2.71$

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Times mirror and glass company
Sales	\)126,000
Less: Cost of goods sold	93,000
Gross profit	\(33,000
Less: selling and administrative expenses	11,000
Lease Expenses	4,000
Operating profit*	\)18,000
Less: Interest expenses	3,000
Earning before taxes	\(15,000
Less: Taxes (30%)	4,500
Earning after taxes	\)10,500