Assante Corporation reported the following data for the period: earnings per share, $4.80; retained earnings, $54,000; revenues, $150,000; capital stock, $30,000; expenses, $126,000. Given the above information, how many shares of stock are outstanding?

Question

Quizplus · Accepted Answer

First, we can use the formula for calculating earnings per share: EPS = (Net Income - Preferred Dividends) / Weighted Average Common Shares Outstanding. Since there is no information about preferred dividends, we can assume that there are none. Therefore, EPS = Net Income / Weighted Average Common Shares Outstanding. Rearranging the formula, we can solve for the weighted average common shares outstanding: Weighted Average Common Shares Outstanding = Net Income / EPS.

Using the given data, we can calculate the net income as follows:
Revenues - Expenses = Net Income
$150,000 - $126,000 = $24,000

Then, we can calculate the weighted average common shares outstanding:
Weighted Average Common Shares Outstanding = Net Income / EPS
$24,000 / $4.80 = 5,000

Therefore, there are 5,000 shares of stock outstanding.

Assante Corporation Reported the Following Data for the Period: Earnings