Selected items from the financial statements for Lorna Company are listed below:
$\begin{array} { l }
\text { Paid in capital, December 31,2014}&\$100,000\
\text {Retained earnings, December 31, 2014 }&\$75,000\
\text {Commonstock dividends declared in 2014 }&\$75,000\
\text { Net income for the year ended December } 31,2014&\$100,000\
\end{array}$

Lorna Company has 5,000 common shares outstanding during the year.What are the earnings per share for the year ended December 31,2014?
A) $12.00
B) $15.00
C) $20.00
D) $25.00

Question

Selected items from the financial statements for Lorna Company are listed below:
$\begin{array} { l  }
 \text { Paid in capital, December 31,2014}&\$100,000\
 \text {Retained earnings, December 31, 2014 }&\$75,000\
 \text {Commonstock dividends declared in 2014 }&\$75,000\
\text { Net income for the year ended December } 31,2014&\$100,000\
\end{array}$

Lorna Company has 5,000 common shares outstanding during the year.What are the earnings per share for the year ended December 31,2014?
A) $12.00
B) $15.00
C) $20.00
D) $25.00

Quizplus · Accepted Answer

Earnings per share (EPS) is calculated as net income divided by the number of common shares outstanding. For Lorna Company, the net income for the year ended December 31, 2014, is $100,000, and there are 5,000 common shares outstanding. Therefore, EPS = $100,000 / 5,000 = $20.00.

Selected Items from the Financial Statements for Lorna Company Are