On January 1,Style Corporation Had 15,000 Shares of Common Stock

question 19

Essay

On January 1,Style Corporation had 15,000 shares of common stock outstanding.On May 1,the corporation sold and issued another 6,000 shares.On December 1,the corporation executed a 2-for-1 stock split.Style Corporation earned $55,000 in net income for the year and declared and paid $4,000 in preferred stock dividends.Calculate the earnings per share.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor involved.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus the cost of goods sold.

Beginning Inventory

The value of all products, goods, and materials in stock at the start of an accounting period.

LIFO

"Last In, First Out," an inventory valuation method where the latest items added to the inventory are the first to be sold.