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Frantic Fast Foods had earnings after taxes of $390,000 in the year 2009 with 300,000 shares outstanding. On January 1, 2010 the firm issued 25,000 new shares. Because of the proceedings from the new shares and other improvements, earnings after taxes increased by 20 percent.
a. Compute earnings per share for 2009.
b. Compute earnings per share for 2010.
Determine the basis for the shares sold consider the FIFO cost method?
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