Final answer:
To find the original earnings per share reported by Worrell Inc. for the year ended September 30, 2019, the effects of a 3-for-1 stock split and a 2% stock dividend need to be reversed. This involves calculating the original number of shares and dividing the restated total earnings by this number to determine the originally reported earnings per share.
Step-by-step explanation:
To calculate the originally reported earnings per share for the year ended September 30, 2019, for Worrell Inc., we must reverse the effects of the stock adjustments that occurred during the fiscal year ended September 30, 2020. The restated earnings per share of $0.94 take into account a 3-for-1 stock split and a 2% stock dividend. Considering the 3-for-1 stock split alone, the original number of shares would have been one third of the current amount. Further, the 2% stock dividend would have increased the number of shares slightly. To find the original earnings per share, we first calculate the equivalent number of original shares prior to the stock split and stock dividend. We do this by taking the number of shares after the stock split and dividing by 3, and then dividing this result by 1.02 to account for the 2% stock dividend.
Let's assume there were 300 shares after the stock adjustments. The calculation would be: (300 shares / 3) / 1.02 = 98.04 shares without the stock adjustments. We then multiply this number of shares by the restated earnings per share ($0.94) to find the total earnings, and then divide by the original number of shares (98.04) to find the original earnings per share.