In 2012, ABC Company reported earnings per share of $2.00 for 10,000 shares.In 2013, there was a 2-for-1 stock split, for which 2013 earnings per share were reported at $2.10.The appropriate earnings per share presentation for a 2-year comparative analysis would be: $$\begin{array} { l c r }
&{ 2013 } &{ 2012 } \
\hline\text { I. } & 2.10 & \$ 2.00 \
\text { II. } & \$ 2.05 & \$ 2.00 \
\text { III. } & \$ 1.05 & \$ 2.00 \
\text { IV. } & \$ 1.05 & \$ 1.00
\end{array}$$

Question

In 2012, ABC Company reported earnings per share of $2.00 for 10,000 shares.In 2013, there was a 2-for-1 stock split, for which 2013 earnings per share were reported at $2.10.The appropriate earnings per share presentation for a 2-year comparative analysis would be: $$\begin{array} { l c r } 
&{ 2013 } &{ 2012 }  \
\hline\text { I. } &  2.10  & \$ 2.00 \
\text { II. } & \$ 2.05 & \$ 2.00 \
\text { III. } & \$ 1.05 & \$ 2.00 \
\text { IV. } & \$ 1.05 & \$ 1.00
\end{array}$$

Quizplus · Accepted Answer

After a stock split, the earnings per share for previous years should be adjusted to reflect the split. In this case, the 2012 EPS should be adjusted to $1.00 (half of $2.00) to reflect the 2-for-1 stock split, making option IV correct.

In 2012, ABC Company Reported Earnings Per Share of $2