Problem 5. [40 points]-EPS Maverick Company’s 2015 Income Statement
Problem 5. [40 points]-EPS
Maverick Company’s 2015 Income Statement:
Sales Revenue $915,000
COGS (444,000)
Selling and Admin. Expenses (289,000)
Interest Expense (150,000)
Net Income $ 32,000
Maverick Company’s Dec 31, 2015 Balance Sheet:
ASSETS LIABILITIES and OWNERS EQUITY
Cash $ 10,000 Accounts Payable $19,000
A/R 42,000 Advance from Customer 10,000
Inventory 85,000 Bonds Payable 61,000
Other Assets 28,000
PP & Equipment 150,000 Common Stock 75,000
Acc. Depreciation (65,000) $6.50 Preferred Stock 80,000
========================= Treasury Stock (15,000)
TOTAL ASSETS $250,000 Retained Earnings 20,000
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TOTAL LIABILITIES and OE $ 250,000
Question: [20 points] In 2016 Maverick decided to buy back (repurchase) 10,000 shares of their stock for $22.00 per share. There were no other stock related transactions in 2016. Maverick’s reported 2016 Net Income was the same as in 2015. What was Mavericks EPS in 2016 ?
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Rating:
/5
Solution: Problem 5. [40 points]-EPS Maverick Company’s 2015 Income Statement