Question

Mayan Company had net income of $35,670. The weighted average common shared outstanding were 8,700. The company has no preferred stock. The company sold 3,700 shares before the end of the year. There were no other stock transactions. The company's earnings per share is:​

Answer 1

The earnings per share (EPS) for Mayan Company is $7.13.

Step-by-step explanation:

To calculate the earnings per share (EPS), we divide the net income by the weighted average common shares outstanding. In this case, the net income is $35,670 and the weighted average common shares outstanding are 8,700. However, since the company sold 3,700 shares before the end of the year, we need to subtract those shares from the weighted average. Therefore, the adjusted weighted average common shares outstanding is 5,000 (8,700 - 3,700).

Now, we can calculate the EPS:

EPS = Net Income / Adjusted Weighted Average Common Shares Outstanding

EPS = $35,670 / 5,000

EPS = $7.13

Therefore, the company's earnings per share is $7.13.