At December 31, 2017, Twin Rivers Company had 450,000 shares of common stock issued and outstanding, 350,000 of which had been issued and outstanding throughout the year and 100,000 of which were issued on September 1, 2017. Net income for the year ended December 31, 2017, was $1,160,000. What should be Twin Rivers' 2017 earnings per common share, rounded to the nearest penny?

3.03

Explanation:

GIVEN the following ;

YEAR 2017:

Number of shares issued and outstanding throughout the year = 350,000.

Number of shares issued on September 1, 2017 (4 months to year end) = 100,000

Net income for the year (December 31, 2017) = $1,160,000

Earning per common share for the year 2017:

(Net income ÷Total Number of shares)

Total number of shares:

350,000 + 100,000 × (4÷12)

350,000 + 33333.3333 = 383333.33

$1,160,000 ÷ 383333.333 = 3.026

Earning per share = 3.03