for the year ended december 31, 2021, norstar industries reported net income of $970,000. at january 1, 2021, the company had 1,090,000 common shares outstanding. the following changes in the number of shares occurred during 2021: apr. 30 sold 90,000 shares in a public offering. may 24 declared and distributed a 5% stock dividend. june 1 issued 102,000 shares as part of the consideration for the purchase of assets from a subsidiary.
Required: Compute Norstar's earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Do not round intermediate calculations. Round "EPS" answer to 2 decimal places.) Numerator Denominator = Earnings per Share = $ 0.64

Earnings per share is a financial ratio which helps investors decide whether they will invest in a company or not. EPS computes the relationship between the net income and the common stock, which means that how much of net income is attributable to one share of common stock.

Date Shares outstanding allocation rate Weighted average no. of shares

Jan. 1 1,090,000 x 1.05 12/12 1,144,500

Apr. 30 90,000 x 1.05 8/12 63,000

May. 31 Stock dividend of 5%

Jun. 1 102,000 7/12 59,500

Total WACSO 1,267,000

NUMERATOR DENOMINATOR EARNINGS PER SHARE

970000 1,267,000 0.77

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