Question

During the year ended December 31, 2020, Gluco Inc. split its stock on a 3-for-1 basis. In its annual report for 2019, the firm reported net income of $934,600 for 2019, with an average 253,600 shares of common stock outstanding for that year. There was no preferred stock.

Required:
What amount of net income for 2019 will be reported in Gluco's 2020 annual report?
Calculate Gluco's earnings per share for 2019 that would have been reported in the 2019 annual report. (Round your answer to 2 decimal places.)
Calculate Gluco's earnings per share for 2019 that will be reported in the 2020 annual report for comparative purposes. (Round your answer to 2 decimal places.)
a. Net Income
b. Earnings per share
c. Earnings per share

Answer 1

Answer and Explanation:

The computation is shown below:

a. The net income for the year 2019 is $934,600

b. The earning per share for the year 2019 is

= $934,600 ÷ 253,600 shares

= $3.69 per share

c. The earning per share reported in the 2020 annual report is

= $93,4600 ÷ 253,600 × 3

= $1.23 per share

In this way it should be calculated