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:

IFRS

Stands for International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) for global use.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

FIFO

First-In, First-Out, an inventory valuation method where goods purchased first are sold first.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set.