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At the end of the year, the records of NCIS Corporation provided the following selected and incomplete data: Common stock ($10 par value); no changes in account during the year. Shares authorized: 210,000. Shares issued: _______ (all shares were issued at $15 per share; $2,130,000 total cash collected). Treasury stock: 4,000 shares (repurchased at $22 per share). The treasury stock was acquired after a stock split was announced. Net income: $262,200. Dividends declared and paid: $140,760. Retained earnings beginning balance: $565,000.Required: 1. Complete the following tabulation: Shares authorized Shares issued Shares outstanding 2. What is the balance in the Additional Paid-in Capital account. Additional paid-in capital 3. What is earnings per share (EPS). (Round your answer to 2 decimal places.) Earnings per share

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Answer:

1) Shares authorized: 210,000.

Shares issued: 142,000 shares

Shares outstanding: 135,000 shares

2) Balance in Additional paid in Capital is $710,000

3) Earning Per Share is $1.94 per share

Explanation:

1) Shares Authorized = 210,000 shares

Shares issued = Cash Collected ÷ Issue Price

= $2,130,000 ÷ $15 per share = 142,000

Shares outstanding = Shares issued - Treasury Stock

= 142,000 shares - 7,000 shares

= 135,000 shares

2) Balance in Additional paid in Capital = (Issue Price - Par Value) × Shares issued

= ($15 - $10) × 142,000 shares

= $710,000

3) Earning Per Share = Net Income ÷ Shares Outstanding

= $262,200 ÷ 135,000 shares

= $1.94 per share

Tundexi
  1. Shares authorized = 210,000 shares; Shares issued = 142,000 shares; Shares outstanding = 135,000 shares
  2. Balance in Additional paid in Capital = $710,000
  3. Earning Per Share = $1.94 per share

1. The Authorized shares refers to shares that a firm is allowed by law to issue to the public.

  • The Authorized shares = 210,000 shares

The Issued shares refers to the shares that the company offers to the public for subscription.

  • The Issued shares = Cash Collected / Issue Price = $2,130,000 / $15 per share = 142,000 shares

The outstanding shares refers to the remaining shares after the share repurchase.

  • The outstanding shares = Shares issued - Treasury Stock = 142,000 shares - 7,000 shares = 135,000 shares

2. Balance in Additional paid in Capital = (Issue Price - Par Value) × Shares issued

Balance in Additional paid in Capital = ($15 - $10) * 142,000 shares

Balance in Additional paid in Capital = $5 * 142,000 shares

Balance in Additional paid in Capital = = $710,000

3. Earning Per Share = Net Income / Shares Outstanding

Earning Per Share = $262,200 / 135,000 shares

Earning Per Share = $1.94 per share

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