Gold Coast Supplies Had 80,000 Shares of Common Stock Outstanding

question 7

Multiple Choice

Gold Coast Supplies had 80,000 shares of common stock outstanding at January 1.On May 1,Gold Coasts Supplies issued 21,500 shares of common stock.Outstanding all year were 30,000 shares of nonconvertible preferred stock on which a dividend of $3 per share was paid in December.Net income for the year was $300,000.Gold Coast Supplies should report basic earnings per share for the year of

• A) $2.07
• B) $2.23
• C) $3.18
• D) $3.26

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Definitions:

Pension Asset

Refers to the resources set aside by a company in a pension fund to meet future pension liabilities to its employees.

Projected Benefit Obligation

A measurement of the present value of future pension benefits earned to date as estimated by actuaries, used in accounting for pension plans.

Balance Sheet

A report detailing a company's assets, obligations, and the equity of its shareholders at a particular moment.

Projected Benefit Obligation

An actuarial estimate of the total present value of future retirement benefits earned to date, adjusted for expected future salary increases.