Share
Explore BrainMass

Earning per share

On December 31,2003, Bercalir, Inc. had 200,000,000 shares of common stock and 3,000,000 shares of 9%, $100 par, value cumulative preferred stock issued and outstanding. There were no preferred dividends in mrears as of January I, 2004. On March I, 2004, Bercalir purchased 24,000,000 shares of its common stock as treasuIy stock. Bercalir issued a 5% common stock dividend on July I, 2004. Four million treasury shares were sold on October I, 2004 and the net income for the year ended December 31,2004 was $150,000,000.

Required:

Compute the basic earnings per share for the year ended December 31, 2004. computations.

Solution Preview

In order to calculate the basic earnings per share, we need to calculate the weighted average number of shares outstanding.
The shares outstanding at various times were
Jan 1 ................................200,000,000
Mar ...

Solution Summary

The solution explains how to calculate the basic earnings per share

$2.19