Question

Sugarland Industries reported a net income of $820,750 on December 31, 2018. At the beginning of the year, the company had 570,000 common shares outstanding. On April 1, the company sold 31,200 shares for cash. On August 31, the company issued 56,400 additional shares as part of a merger.

Required: Compute Sugarland's net income that would produce a basic EPS of $2.35 per share for 2018.

Answer 1

Sugarland's net income that would produce a basic EPS of $2.35 per share for 2018 is $1545360.

Step-by-step explanation:

EPS = Net Income/outstanding shares

= 2.35 per share

outstanding shares = 570000 + 31200 + 56400

= 657600

2.35 = Net Income/657600

2.35 x 657600 = Net Income

Net income = $1545360

Therefore, Sugarland's net income that would produce a basic EPS of $2.35 per share for 2018 is $1545360.