Platinum Company Reports Net Income of $520,000 for 2018 and Declared

question 2

Multiple Choice

Platinum Company reports net income of $520,000 for 2018 and declared a cash dividend of $1 per share on each of its 100,000 shares of common stock outstanding.What are earnings per share for 2018?

• A)$5.20 per share
• B)$1.00 per share
• C)$1.20 per share
• D)$4.80 per share

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Definitions:

Ample Capacity

A situation where a company or facility has enough resources, often production capability or space, to meet current or future demand without strain.

Allocation Bases

Allocation bases are criteria or standards used to distribute costs among different departments, products, or activities in a fair and logical manner.

Indirect Costs

Indirect costs are expenses not directly linked to a specific product or service, such as administrative salaries, utilities, and rent. These costs are essential for the overall operation but not traceable to a single item.

Department Income Statements

Financial statements that show the revenue, expenses, and profit or loss of individual departments within an organization.