Cracker Company Had 2 Million Shares of Common Stock Outstanding

question 83

Short Answer

Cracker Company had 2 million shares of common stock outstanding all through 2015.On April 1,2016,an additional 100,000 shares were sold and issued.On September 30,2016,Cracker declared a 2-for-1 stock split.Net income in 2016 and 2015 was $10 million and $8 million,respectively.In the 2016 comparative financial statements,EPS (rounded)would be reported as follows:

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Definitions:

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Profit

The financial gain achieved when the revenue from a business activity exceeds the expenses, costs, and taxes associated with maintaining the activity.

Demand Curve

A chart that depicts how the quantity of a product demanded by buyers is related to its price, usually sloping downwards.

Marginal Revenue

The additional income earned from selling one more unit of a good or service, crucial for decision-making on output levels.