Earnings Per Common Share Calculation
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At December 31, 2007, Norbett Company had 500,000 shares of common stock issued and outstanding, 400,000 of which had been issued and outstanding throughout the year and 100,000 of which were issued on October 1, 2007. Net income for the year ended December 31, 2007, was $1,020,000. What should be Norbett's 2007 earnings per common share, rounded to the nearest penny?
1. $2.40
2. $2.27
3. $2.02
4. $2.55
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Solution Summary
This solution contains step-by-step calculations and justifications to determine the earnings per common share for the net income in December 31st, 2007.
Solution Preview
Earnings per share is calculated be dividing the net income by the average number of shares outstanding.
In the problem above, it is stated that 500,000 shares existed at the end of the year.
It also states that ...
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