Gluco's earnings per share for 2022 that will be reported in the 2023 annual report for comparative purposes is approximately $1.82.
a. In Gluco Incorporated's 2023 annual report, the amount of net income for 2022 will remain the same at $992,500. The stock split that occurred in 2023 does not impact the reported net income for the previous year.
b. To calculate Gluco's earnings per share (EPS) for 2022 that would have been reported in the 2022 annual report, we divide the net income by the average number of shares outstanding. Using the given information of net income as $992,500 and an average of 272,000 shares outstanding, the calculation would be as follows:
EPS = Net income / Average shares outstanding
EPS = $992,500 / 272,000
EPS ≈ $3.65 (rounded to 2 decimal places)
Therefore, Gluco's earnings per share for 2022 that would have been reported in the 2022 annual report is approximately $3.65.
c. To calculate Gluco's earnings per share for 2022 that will be reported in the 2023 annual report for comparative purposes, we need to adjust the average shares outstanding to reflect the stock split on a 2-for-1 basis. The new average shares outstanding would be double the previous amount, which is 272,000 x 2 = 544,000 shares.
Using the same net income of $992,500 and the adjusted average shares outstanding of 544,000, the calculation would be as follows:
EPS = Net income / Adjusted average shares outstanding
EPS = $992,500 / 544,000
EPS ≈ $1.82 (rounded to 2 decimal places)