The following information was taken from the records of Elton Corporation for the period ending December 31, 2012: Assuming that 6,000 shares of stock are outstanding, earnings per share is approximately

Question

The following information was taken from the records of Elton Corporation for the period ending December 31, 2012:  Assuming that 6,000 shares of stock are outstanding, earnings per share is approximately

Quizplus · Accepted Answer

Earnings per share (EPS) = Net Income / Average Number of Shares Outstanding
From the given information, we have:
Net Income = $1,600,000
Number of Shares Outstanding = 6,000
EPS = $1,600,000 / 6,000 = $266.67 per share
However, EPS is typically reported on a per-share basis, so we need to divide by the number of shares to get the EPS for each shareholder:
EPS per Share = EPS / Number of Shares Outstanding
EPS per Share = $266.67 / 6,000 = $0.044 per share
Rounding off to the nearest cent, EPS per share is approximately $0.27. Therefore, the correct answer is C) $0.27.

The Following Information Was Taken from the Records of Elton