Question

Jett Corp. had 600,000 shares of common stock outstanding on January 1, issued 900,000 shares on July 1, and had income applicable to common stock of $1,837,500 for the year ending December 31, 2007. Earnings per share of common stock for 2007 would be:_____.

a. $1.05.
b. $.50.
c. $.60.
d. $.70.
e. $.84.

Answer 1

the earning per share is $2.45

Step-by-step explanation:

The computation of the earning per share is given below;

= Net income ÷ outstanding shares

= ($1,837,500) ÷ (600,000 shares + 900,000 shares) ÷ 2

= $1,837,500 ÷ 750,000

= $2.45

hence, the earning per share is $2.45

This is the correct answer but the same is not provided in the given options