On December 31, 2012, Belair Corporation Had 100,000 Shares of Common

question 108

Essay

On December 31, 2012, Belair Corporation had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $50 par, cumulative preferred stock outstanding. On February 28, 2013, Belair purchased 24,000 shares of common stock on the open market as treasury stock paying $20 per share. On June 30, 2013, Belair declared and issued a 2-for-1 stock split on outstanding common stock. Belair sold 6,000 treasury shares on September 30, 2013, for $15 per share. Net income for 2013 was $180,905.
Required:
Compute Belair's basic earnings per share for 2013.

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Definitions:

Specialization of Labor

The division of labor into distinct tasks, where individuals specialize in specific tasks, improving efficiency and productivity.

Adam Smith

An 18th-century economist known for his writings on classical economics, including the concept of the division of labor and the benefits of free markets.

Absolute Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower cost per unit than competitors using the same amount of resources.

Comparative Advantage

An economic theory that suggests a country should produce and export goods in which it has a lower opportunity cost than other countries.