Question
Question:E12-4 Pratt Chapter 12 Shareholders equity I NEED HELP WITH A,B,C, D below- I am having difficulties determining how to calculate earnings per share and
Question:E12-4 Pratt Chapter 12 Shareholders equity
I NEED HELP WITH A,B,C, D below- I am having difficulties determining how to calculate earnings per share and the purchase prices. Thanks
Before the merger of Wendys and Arbys. Wendys made a huge purchase of its own shares and in total bought back over 26 million shares for approximately $1 billion. Before the purchase, 12.5 million shares were outstanding, and the financial statement appeared as follows in millions_
Income statement
Revenue $2,439
Expenses 2,345
--------------------------
Net income 94
Balance Sheet
Assets $3,060
Liabilities $1048
--------------------------
Shareholders equity $2,012
a. provide the journal entry for the treasury stock purchase
Treasury stock ??
Cash ??
Purchase treasury stock (26MMX1B)
b. compute the ratio of total liabilities to shareholders equity before and after the purchase
1048/2012 before
After?
c. compute earnings per share before and after the purchase
No idea on how to compute earnings per share
D. Comment on why a company might choose to purchase treasury stock.
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