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11 January, 19:08

For the year ended December 31, 2021, Norstar Industries reported net income of $975,000. At January 1, 2021, the company had 1,110,000 common shares outstanding. The following changes in the number of shares occurred during 2021: Apr. 30 Sold 95,000 shares in a public offering. May 24 Declared and distributed a 5% stock dividend. June 1 Issued 108,000 shares as part of the consideration for the purchase of assets from a subsidiary. Required: Compute Norstar's earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Round "EPS" answer to 2 decimal places. Do not round intermediate calculations.)

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  1. 11 January, 19:33
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    EPS as at 31 Dec 2012 is $0.71

    Explanation:

    The common shares outstanding as at 31st December 2021 is equal to:

    Opening outstanding share of the year 2021 + Issuance of share in Apr. 30.2021 + Stock distributed as dividend at May. 24.2021 + Issuance of stock in June. 1.2021

    in which:

    Opening outstanding share of the year 2021 = 1,110,000

    Issuance of share in Apr. 30.2021 = 95,000

    Stock distributed as dividend at May. 24.2021 = Stock outstanding at May. 24 x 5% = (1,110,000 + 95,000) x 5% = 60,250

    Issuance of stock in June. 1.2021 = 108,000

    => The common shares outstanding as at 31st December 2021 = 1,373,250

    => EPS = 975,000/1,373,250 = $0.71
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Home » Business » For the year ended December 31, 2021, Norstar Industries reported net income of $975,000. At January 1, 2021, the company had 1,110,000 common shares outstanding. The following changes in the number of shares occurred during 2021: Apr.
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