Question

Quantum Technology had \(669,000 of retained earnings on December 31, 20X2. The company paid common dividends of \)35,500 in 20X2 and had retained earnings of $576,000 on December 31, 20X1. How much did Quantum Technology earn during 20X2, and what would earnings per share be if 47,400 shares of common stock were outstanding?

Short answer

The net earnings of the company during 20X2 was $128,500, and the earnings per share would be $2.71.

Step-by-step solution

Calculation of net earning of Quantum Technology during 20X2

Closing retained earning-Opening retained earning+Dividend paid

=$669,000-$576,000+35,500

=$128,500

Calculation of earning per share

$$\begin{gathered} EPS=\frac{NetEarning}{No.ofsharesouts\tan ding} \\ =\frac{\$128,500}{47,400} \\ =\$2.71 \end{gathered}$$