For the year ended December 31, 2016, Norstar Industries reported net income of

Question

For the year ended December 31, 2016, Norstar Industries reported net income of $995,000. At January 1, 2016, the company had 1,190,000 common shares outstanding. The following changes in the number of shares occurred during 2016: Apr. 30 Sold 125,000 shares in a public offering. May 24 Declared and distributed a 5% stock dividend. June 1 Issued 132,000 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, 2016. (Enter your answers in thousands.) Numerator | / | Denominator| | Earnings per Share

Explanation / Answer

1 Net income 995000 Number of share o/s Number of share Period covered Weighted shares January 1 1190000 0.333333333              396,666.67 April 30 - Sold 125000 shares 1065000 0.066666667                71,000.00 May 24 - 53250 Stock dividend 1118250 0.016666667                18,637.50 June-1- 132000 shares issued 1250250 0.594444444              743,204.17          1,229,508.33 EPS Net Income/ Weighted Shares                             0.81

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