# Excel Applications for Accounting Principles

## Quiz 13 :Earnings Per Share EPS

Question Type
PROBLEM DATA Ponce Towers, Inc., had 50,000 shares of common stock and 10,000 shares of $100 par value, 8% preferred stock outstanding on January 1, 2011. Each share of preferred stock is convertible into four shares of common stock. The stock has not been converted. During the year, Ponce Towers issued additional shares of common stock as follows: For 2011, Ponce Towers, Inc., had income from continuing operations of$545,000 and a $72,000 loss from discontinued operations (net of tax). REQUIREMENT As vice president of finance for the firm, you have been asked to calculate earnings per share for 2011. The worksheet EPS has been provided to assist you. Free Essay Answer: Answer: Worksheet showing earnings per share for the company: Tags PROBLEM DATA Ponce Towers, Inc., had 50,000 shares of common stock and 10,000 shares of$100 par value, 8% preferred stock outstanding on January 1, 2011. Each share of preferred stock is convertible into four shares of common stock. The stock has not been converted. During the year, Ponce Towers issued additional shares of common stock as follows: For 2011, Ponce Towers, Inc., had income from continuing operations of $545,000 and a$72,000 loss from discontinued operations (net of tax). REQUIREMENT Open the file EPS from the website for this book at cengagebrain.com. Enter all input items (A-F) in the appropriate cells in the Data Section. Enter all formulas in the appropriate cells in the Answer Section. Enter your name in cell A1. Save the completed file as EPS2. Print the worksheet when done. Also print your formulas. Check figure: Basic earnings per share from continuing operations (cell D29), $5.94. Free Essay Answer: Answer: Worksheet showing earning per share: Basic earnings per share is calculated by taking net income less dividend requirements, which in this case is 8% for preferred stock, and dividing it by the weighted average common shares outstanding. Diluted earnings per share is calculated the same way except outstanding preferred stock is converted into outstanding common stock and added to the weighted average common shares outstanding. Tags WHAT-IF ANALYSIS During 2012, Ponce Towers issued 30,000 additional shares of common stock on June 1 and 24,000 on November 1. The company earned$602,000 from continuing operations and \$28,000 from another segment of the business that was discontinued during the year. Use your completed worksheet to prepare a computation of earnings per share for 2012. Erase any data in the Data Section that are not required for 2012. Save the solution for 2012 as EPS3 and print the results.
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