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The comparative financial statements prepared at December 31, 2017, for Pinnacle Plus showed the following summarized data:
| | 2017 | 2016 |
| Income Statement | | | | | | |
| Sales Revenue* | $ | 122,000 | | $ | 111,000 | |
| Cost of Goods Sold | | 56,800 | | | 52,800 | |
| | | | | | | |
| Gross Profit | | 65,200 | | | 58,200 | |
| Operating Expenses | | 39,600 | | | 36,600 | |
| Interest Expense | | 3,800 | | | 3,800 | |
| | | | | | | |
| Income before Income Tax Expense | | 21,800 | | | 17,800 | |
| Income Tax Expense (30%) | | 6,540 | | | 5,340 | |
| | | | | | | |
| Net Income | $ | 15,260 | | $ | 12,460 | |
| | | | | | | |
| Balance Sheet | | | | | | |
| Cash | $ | 47,108 | | $ | 12,580 | |
| Accounts Receivable, Net | | 35,000 | | | 38,000 | |
| Inventory | | 31,000 | | | 36,000 | |
| Property and equipment, Net | | 91,000 | | | 101,000 | |
| | | | | | | |
| Total Assets | $ | 204,108 | | $ | 187,580 | |
| | | | | | | |
| Accounts Payable | $ | 39,968 | | $ | 32,800 | |
| Income Tax Payable | | 980 | | | 480 | |
| Note Payable, Long-Term | | 38,000 | | | 38,000 | |
| | | | | | | |
| Total Liabilities | | 78,948 | | | 71,280 | |
| Contributed Capital (8,900 shares) | | 89,000 | | | 89,000 | |
| Retained Earnings | | 36,160 | | | 27,300 | |
| | | | | | | |
| Total Liabilities and Shareholders' Equity | $ | 204,108 | | $ | 187,580 | |
| | | | | | | |
| |
3-a. Compute the earnings per share for 2017 and 2016.
Answer & Explanation
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