Harrison Company Has Common Stock of $50,000 and Retained Earnings

question 70

Essay

Harrison Company has common stock of $50,000 and retained earnings of $40,000 at yearend. During the year, 10,000 shares of stock were outstanding. Net income was reported as $5,000.
A. Calculate earnings per share.
B. How does earnings per share differ from most of the other ratios with respect to financial statements?

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Definitions:

Straight-Line Depreciation

Straight-line depreciation is a method of calculating the depreciation expense of an asset evenly over its useful life.

Straight-Line Depreciation

A technique for determining an asset's depreciation, presuming that the asset will depreciate by a consistent value annually throughout its projected useful life.

Incremental Sales

The additional revenue generated from a particular business action or decision, beyond existing sales.

Straight-Line Depreciation

A process for dividing the cost of an asset equally over the duration of its usability.