The Common Stock account for Alpha Corporation on January 1, 2019 was $37,500

Accounting Nov 04, 2020

The Common Stock account for Alpha Corporation on January 1, 2019 was $37,500. On June 1, 2019 Alpha issued an additional 2,500 shares of common stock. The Common Stock is $5 par. There was neither Preferred Stock nor any Treasury Stock, Paid in Capital Excess to par Common Stock was $10,000 on January 1 and $15,000 on June 2 and retained earnings was $104,700. Use this information to determine for December 31, 2019 the amount of:

a) Total Stockholders Equity

b) Earnings per Share

Expert Solution

a) Total stockholder's equity = $169,700

b) Computation of the earnings per share:-

Weighted average number of shares = ($37,500/$5) + (2,500*5/12)

= 7,500 + 1,042

= 8,542 shares

Earnings per share = Net income / Weighted average number of shares

= $104,700 / 8,542

= $12.26 per share

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