Allen Lumber Company had earnings after taxes of $750,000 in the year 2015 with 300,000 shares outstanding on December 31, 2015. On January 1, 2016, the firm issued 50,000 new shares. The company took the proceeds from these new shares as well as other operating improvements and earned $937,500 earnings after taxes in 2016. Earnings per share for the year 2016 were

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Year 2015
Earnings per share = (Earnings after taxes/Shares outstanding) = ($750,000/300,000) = $2.50
Year 2016
Earnings after taxes = $750,000 × 1.25 = $937,500
Shares outstanding = 300,000 + 50,000 = 350,000
Earnings per share = $937,500/350,000 = $2.68

Allen Lumber Company Had Earnings After Taxes of $750,000 in the Year