Question

Quantum Technology had $640,000 of retained earnings on December 31, 2010. The company paid common dividends of $30,000 in 2010 and had retained earnings of $500,000 on December 31, 2009.(a) How much did Quantum Technology earn during 2010? (Omit the "$" sign in your response.)Earnings available to common stockholders $(b) What would earnings per share be if 40,000 shares of common stock were outstanding? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Answer 1

Answer:

(a). Earning during 2010 = $170,000

(a). Earning per share = $4.25/share

Explanation:

Earning during 2010

Retained Earnings On December 31, 2009 = $500,000

Retained Earnings On December 31, 2010 = 640,000

Dividend paid during 2010 = $30,000

Earning for the year = 640,000+30,000-500,000 = 170,000

Earning per share

Earning for the year = 170,000

No of Shares outstanding = 40,000

Earning per share = 170,000/40,000 = $4.25/share