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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?

Short Answer

Expert verified

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

Step by step solution

01

Calculation of net earning of Quantum Technology during 20X2

Closing retained earning-Opening retained earning+Dividend paid

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

=$128,500

02

Calculation of earning per share

EPS=NetEarningNo.ofsharesoutstanding=$128,50047,400=$2.71

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Most popular questions from this chapter

Jolie Foster Care Homes Inc. shows the following data:

Year

Net Income

Total assets

Stockholder鈥檚 Equity

Total debts

20X1

\(155,000

\)2,390,000

\(761,000

\)1,629,000

20X2

191,000

2,700,000

966,000

1,734,000

20X3

208,000

2,730,000

1,770,000

960,000

20X4

192,000

2,470,000

2,220,000

250,000

a. Compute the ratio of net income to total assets for each year and commenton the trend.

Arrange the following income statement items so they are in the proper order of an income statement:

Taxes

Earning per share

Share Outstanding

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Cost of goods sold

Depreciation Expense

Earning after taxes

Preferred Stcok dividends

Earning available to common stockholders

Sales

Selling and administrative expense

Gross profit

Watt鈥檚 Lighting Stores made the following sales projection for the next six months. All sales are credit sales.

March

\(35,000

April

41,000

May

30,000

June

39,000

July

47,000

August

49,000

Sales in January and February were \)38,000 and $37,000, respectively. Experience has shown that of total sales, 10 percent are uncollectible, 30 percent are collected in the month of sale, 40 percent are collected in the following month, and 20 percent are collected two months after sale.

Prepare a monthly cash receipts schedule for the firm for March through

August.

Of the sales expected to be made during the six months from March through August, how much will still be uncollected at the end of August? How much of this is expected to be collected later?

The Sterling Tire Company鈥檚 income statement for 20X1 is as follows:

STERLINE TIRE COMPANY

Income Statement

For the year ended December 31, 20X1

Sales (20,000 tires at \(60 each)

\)1,200,000

Less: variable costs (20,000 tires at \(30)

600,000

Less: fixed cost

400,000

Earnings before interest and taxes (EBIT)

\)200,000

Interest expenses

50,000

Earning before taxes (EBT)

\(150,000

Income tax expenses (30%)

45,000

Earning after taxe (EAT)

\)105,000

Given this income statement, compute the following:

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Jim Short鈥檚 Company makes clothing for schools. Sales in 20X1 were

\(4,820,000. Assets were as follows:

Cash

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Accounts receivable

889,000

Inventory

411,000

New plant and equipment

520,000

Total assets

$1,983,000

a. Compute the following:

1. Accounts receivable turnover.

2. Inventory turnover.

3. Fixed asset turnover.

4. Total asset turnover.
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