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Sagot :
Answer:
A. $3.37
B. $3.41
Explanation:
A.Computation for earnings per share for the year 20X1
20X1 Earnings per share= $1,170,000/347,000
20X1 Earnings per share= $3.37
Therefore earnings per share for the year 20X1 will be $3.37
B. Computation for earnings per share for the year 20X2.
First step is to calculate the Earnings available to common stockholders
Earnings available to common stockholders = $1,170,000x (1+.31 )
Earnings available to common stockholders = $1,170,000x 1.31
Earnings available to common stockholders = = $1,532,700
Second step is to calculate the Common shares outstanding
Common shares outstanding = 347,000 + 103,000
Common shares outstanding = 450,000
Now let calculate the earnings per share for the year 20X2
20X2 Earnings per share=$1,532,700/450,000
20X2 Earnings per share = $3.41
Therefore earnings per share for the year 20X2 will be $3.41
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