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Assignment Print View13.4

- Liberty Ventures Inc. reported a $383,720 profit in 2020 and declared $18,100 in preferred dividends. - During the year, the company sold shares twice and issued a 20% common share dividend. - The weighted-average number of common shares outstanding during the year was 181,000 shares. - Earnings per share was $2.02.

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40 views

Assignment Print View13.4

- Liberty Ventures Inc. reported a $383,720 profit in 2020 and declared $18,100 in preferred dividends. - During the year, the company sold shares twice and issued a 20% common share dividend. - The weighted-average number of common shares outstanding during the year was 181,000 shares. - Earnings per share was $2.02.

Uploaded by

alexie aurelio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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11/19/21, 8:44 AM Assignment Print View

Score: 50/50 Points 100 %

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11/19/21, 8:44 AM Assignment Print View
 
4. Award: 2 out of 2.00 points  

Liberty Ventures Inc. reported $383,720 profit in 2020 and declared preferred dividends of $18,100. The following changes
in common shares outstanding occurred during the year:
 
Jan. 1 140,000 common shares were outstanding.
June 30 Sold 20,000 common shares.
Sept. 1 Declared and issued a 20% common share dividend.
Nov. 2 Sold 6,000 common shares.

Calculate the weighted-average number of common shares outstanding during the year and earnings per share. (Round
the "Earnings per share" answer to 2 decimal places.)

Weighted-average outstanding shares 181,000 

Earnings per share $ 2.02 

References

Worksheet Learning Objective: 13-


03 Calculate earnings per
share and describe its
use.

Liberty Ventures Inc. reported $383,720 profit in 2020 and declared preferred dividends of $18,100. The following changes
in common shares outstanding occurred during the year:
 
Jan. 1 140,000 common shares were outstanding.
June 30 Sold 20,000 common shares.
Sept. 1 Declared and issued a 20% common share dividend.
Nov. 2 Sold 6,000 common shares.

Calculate the weighted-average number of common shares outstanding during the year and earnings per share. (Round
the "Earnings per share" answer to 2 decimal places.)

Weighted-average outstanding shares 181,000


Earnings per share $ 2.02

 
Explanation:

Profit − Preferred Dividends


Earnings per share:    
Weighted−Average Common Shares Outstanding
       
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11/19/21, 8:44 AM Assignment Print View
  =   ($383,720 − $18,100) / 181,000*
  =   $2.02 per share

*Calculations:
 
Effect of
Outstanding Share Fraction Weighted
Time Period Shares   Dividend   of Year   Average  
January – June 140,000   × 1.20  × 6/12   = 84,000  
July – August 160,000   × 1.20  × 2/12   = 32,000 
September – October 192,000   × 1  × 2/12   = 32,000 
November – December 198,000   × 1  × 2/12   = 33,000  
Weighted – average outstanding shares                 181,000  

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