Calculate the earnings per share

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Question - DEF Corporation has the following share capital and retained earnings balances at December 31, 2018.

Issued share capital 2,000,000 common shares $10,000,000

Retained earnings 90,000,000

$100,000,000

Answer the following three independent questions using the above information:

i) If a 5% stock dividend is issued when the shares are trading for $ 10 per share, prepare the journal entry to record the stock dividend.

ii) If a 2 for 1 stock split is announced, prepare the journal entry to record the stock split.

iii) If DEF Corporation had net income of $3,000,000 in 2018 and 1,000,000 common shares outstanding at December 31, 2017. Calculate the earnings per share.

Reference no: EM133069906

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