Question

Frantic Fast Foods had earnings after taxes of $1,380,000 in 20X1 with 301,000 shares outstanding. On January 1, 20X2, the firm issued 12,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 30 percent.Compute earnings per share for the year 20X1

Answer 1

$4.58

Step-by-step explanation:

The formula to compute the earning per share is shown below:

Earning per share = (Earnings after tax) ÷ (Number of shares outstanding)

= ($1,380,000) ÷ (301,000 shares)

= $4.58

We simply divide the earning after tax by the outstanding share so that the approximate earning per share can come