A portion of the combined statement of income and retained earnings of Seminole Inc. for the current year follows. Income from continuing operations $15,000,000 Loss from discontinued operations, net of applicable income tax (Note 1) 1,340,000 Net income 13,660,000 Retained earnings at the beginning of the year 83,250,000 96,910,000 Dividends declared: 00On preferred stock—$6.00 per share $ 300,000 00On common stock—$1.75 per share 14,875,000 15,175,000 Retained earnings at the end of the year $81,735,000 Note 1. During the year, Seminole Inc. suffered a major loss from discontinued operations of $1,340,000 after applicable income tax reduction of $1,200,000. At the end of the current year, Seminole Inc. has outstanding 8,500,000 shares of $10 par common stock and 50,000 shares of 6% preferred. On April 1 of the current year, Seminole Inc. issued 1,000,000 shares of common stock for $32 per share to help finance the loss from discontinued operations. Instructions Compute the earnings per share on common stock for the current year as it should be reported to stockholders.
A portion of the combined statement of income and retained earnings of Seminole Inc. for the current year follows. Income from continuing operations $15,000,000 Loss from discontinued operations, net of applicable income tax (Note 1) 1,340,000 Net income 13,660,000 Retained earnings at the beginning of the year 83,250,000 96,910,000 Dividends declared: 00On preferred stock—$6.00 per share $ 300,000 00On common stock—$1.75 per share 14,875,000 15,175,000 Retained earnings at the end of the year $81,735,000 Note 1. During the year, Seminole Inc. suffered a major loss from discontinued operations of $1,340,000 after applicable income tax reduction of $1,200,000. At the end of the current year, Seminole Inc. has outstanding 8,500,000 shares of $10 par common stock and 50,000 shares of 6% preferred. On April 1 of the current year, Seminole Inc. issued 1,000,000 shares of common stock for $32 per share to help finance the loss from discontinued operations. Instructions Compute the earnings per share on common stock for the current year as it should be reported to stockholders.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 23E
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A portion of the combined statement of income and
Income from continuing operations |
$15,000,000
|
|
Loss from discontinued operations, net of applicable income tax (Note 1) |
1,340,000
|
|
Net income |
13,660,000
|
|
Retained earnings at the beginning of the year |
83,250,000
|
|
96,910,000
|
||
Dividends declared: | ||
00On |
$ 300,000
|
|
00On common stock—$1.75 per share |
14,875,000
|
15,175,000
|
Retained earnings at the end of the year |
$81,735,000
|
|
Note 1. During the year, Seminole Inc. suffered a major loss from discontinued operations of $1,340,000 after applicable income tax reduction of $1,200,000. |
At the end of the current year, Seminole Inc. has outstanding 8,500,000 shares of $10 par common stock and 50,000 shares of 6% preferred. On April 1 of the current year, Seminole Inc. issued 1,000,000 shares of common stock for $32 per share to help finance the loss from discontinued operations.
Instructions
Compute the earnings per share on common stock for the current year as it should be reported to stockholders.
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