The following information is taken from the current year financial statement of EC (dollar figures and shares of stock are in thousands.) the fist three items are net of applicable income tax. The loss from continuing operations does not include the loss from lawsuit.Loss from lawsuit (considered unusual and infrequent)..$  (8,490)Loss from continuing operations…………………………..$  (16,026)Income from discontinued operations…………………$      6,215Preferred stock dividend requirements………………….$   (2,778)Weighted average number of share of common stock outstanding………………………………………………….$  39,739Rearrange the items to present in good from the las portion of the income statement for the EC, beginning with “loss from continuing operations.”Calculate the amount of the net loss per share for the period. (do not calculate per share amounts for subtotals, such as income from continuing operations. Please could you compute the single earnings per share amounts.)

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Asked Aug 6, 2019
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The following information is taken from the current year financial statement of EC (dollar figures and shares of stock are in thousands.) the fist three items are net of applicable income tax. The loss from continuing operations does not include the loss from lawsuit.

Loss from lawsuit (considered unusual and infrequent)..$  (8,490)

Loss from continuing operations…………………………..$  (16,026)

Income from discontinued operations…………………$      6,215

Preferred stock dividend requirements………………….$   (2,778)

Weighted average number of share of common

 stock outstanding………………………………………………….$  39,739

  1. Rearrange the items to present in good from the las portion of the income statement for the EC, beginning with “loss from continuing operations.”
  2. Calculate the amount of the net loss per share for the period. (do not calculate per share amounts for subtotals, such as income from continuing operations. Please could you compute the single earnings per share amounts.)

 

 

 

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Expert Answer

Step 1

Loss from continuing operations:

 

It refers to the loss incurred from ongoing business, it can be calculated as a difference in revenue and expenses of a continuing business. Loss occurs when expenses are more than the revenue of the business.

Step 2

The required portion of the income statement for the EC is prepared using MS Excel, as follows:

 

The results of the formulas used in the excel sheet are shown as follows:

 

Thus, the net loss is ($18,301).

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A A B EC 1 EC Partial Income Statement 2 Partial Income Statement Year Ending 4 Loss from continuing operations Year Ending -16026 6215 4 Loss from continuing operations 5 Income from discontinued operations 6 Loss before extraordinary items 7 Extra ordinaary loss (loss from lawsuit)-8490 -16026 5 Income from discontinued operations 6 Loss before extraordinary items 6215.00 =B4+B5 -9811.00 7 Extra ordinaary loss (loss from lawsuit) -8490 =B6+B7 8 Net loss 8 Net loss -18301.00

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Step 3

Calculation of net loss per share for the period:

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(Net loss Prefered stock dividend requirement) Net loss per share Weighted average number of outstanding common stock 18,301 (-S2,778) 39,739 $21,079 39,739 = S0.53

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