Question

In: Accounting

On January 1, 2017, Sunland Industries had stock outstanding as follows. 6% Cumulative preferred stock, $100...

On January 1, 2017, Sunland Industries had stock outstanding as follows.

6% Cumulative preferred stock, $100 par value, issued and outstanding 9,300 shares		$930,000
Common stock, $10 par value, issued and outstanding 220,000 shares		2,200,000

To acquire the net assets of three smaller companies, Sunland authorized the issuance of an additional 160,800 common shares. The acquisitions took place as shown below.

Date of Acquisition		Shares Issued
Company A April 1, 2017		48,000
Company B July 1, 2017		82,800
Company C October 1, 2017		30,000

On May 14, 2017, Sunland realized a $93,600 (before taxes) insurance gain on discontinued operations.

On December 31, 2017, Sunland recorded income of $282,000 from continuing operations (after tax).

Assuming a 50% tax rate, compute the earnings per share data that should appear on the financial statements of Sunland Industries as of December 31, 2017. (Round answer to 2 decimal places, e.g. $2.55.)

Sunland Industries Income Statement December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017
Discontinued Operations Gain, Net of TaxDividendsExpensesExtraordinary LossExtraordinary GainIncome Before Extraordinary ItemIncome From Continuing OperationsIncome Per Share Before Extraordinary ItemLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		$
Discontinued Operations Gain, Net of TaxDividendsExpensesExtraordinary LossExtraordinary GainIncome Before Extraordinary ItemIncome From Continuing OperationsIncome Per Share Before Extraordinary ItemLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues
Discontinued Operations Gain, Net of TaxDividendsExpensesExtraordinary LossExtraordinary GainIncome Before Extraordinary ItemIncome From Continuing OperationsIncome Per Share Before Extraordinary ItemLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues		$

Expert Solution

Earnings per share = Income available to common sharehoders / Weighted Average number of shares

= 226200 / 304900

= 0.74

Computation of Income:-

Income from continuing operations (after tax) $282,000

Less: Preference dividend (930,000 * 6%) $55,800

Income available to common sharehoders 226,200

Computation of Weighted Average number of shares:-

Income Statement:-

Income from continuing operations (after tax) $282,000

Income from discontinuing operations (after tax) (93,600 - 50%) $46,800

If you like the answer, kindly give a ?.

ekkarill92 answered 1 year ago

Question 3 On January 1, 2017, Sheffield Industries had stock outstanding as follows. 6% Cumulative preferred...

Question 3 On January 1, 2017, Sheffield Industries had stock outstanding as follows. 6% Cumulative preferred stock, $100 par value, issued and outstanding 9,700 shares $970,000 Common stock, $10 par value, issued and outstanding 203,000 shares 2,030,000 To acquire the net assets of three smaller companies, Sheffield authorized the issuance of an additional 163,200 common shares. The acquisitions took place as shown below. Date of Acquisition Shares Issued Company A April 1, 2017 49,200 Company B July 1, 2017 82,800...

Exercise 16-20 On January 1, 2017, Flounder Industries had stock outstanding as follows. 6% Cumulative preferred...

Exercise 16-20 On January 1, 2017, Flounder Industries had stock outstanding as follows. 6% Cumulative preferred stock, $100 par value, issued and outstanding 10,300 shares $1,030,000 Common stock, $10 par value, issued and outstanding 188,000 shares 1,880,000 To acquire the net assets of three smaller companies, Flounder authorized the issuance of an additional 162,000 common shares. The acquisitions took place as shown below. Date of Acquisition Shares Issued Company A April 1, 2017 50,400 Company B July 1, 2017 80,400...

Sweet Company’s outstanding stock consists of 1,400 shares of cumulative 6% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 1,400 shares of cumulative 6% preferred stock with a $100 par value and 10,400 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividend Declared year 1 $ 2,400 year 2 $ 6,400 year 3 $ 34,000 The amount of dividends paid to preferred and common shareholders in year 3 is: Multiple Choice a. $16,400 preferred; $17,600...

At December 31, 2016, Novak Corporation had the following stock outstanding. 10% cumulative preferred stock, $100...

At December 31, 2016, Novak Corporation had the following stock outstanding. 10% cumulative preferred stock, $100 par, 108,060 shares $10,806,000 Common stock, $5 par, 4,031,000 shares 20,155,000 During 2017, Novak did not issue any additional common stock. The following also occurred during 2017. Income from continuing operations before taxes $22,200,000 Discontinued operations (loss before taxes) $3,335,000 Preferred dividends declared $1,080,600 Common dividends declared $2,480,000 Effective tax rate 35 % Compute earnings per share data as it should appear in the...

1.Sweet Company’s outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100...

1.Sweet Company’s outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100 par value and 11,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividend Declared Year 1 $ 3,000 Year 2 $ 7,000 Year 3 $ 37,000 The total amount of dividends paid to preferred and common shareholders over the three-year period is: Multiple Choice A.$24,000 preferred;...

Ajax had 5,000 shares of 8% PV=100 preferred stock If the stock is cumulative and the...

Ajax had 5,000 shares of 8% PV=100 preferred stock If the stock is cumulative and the company did not have any money in 2019 but could pay 95000 in 2020 How much would the common stockholders get in 2020? 1.95000 2.40000 3.15000

Sweet Company’s outstanding stock consists of 1,300 shares of cumulative 5% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 1,300 shares of cumulative 5% preferred stock with a $100 par value and 10,300 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 2,300 Year 2 $ 6,300 Year 3 $ 33,500 The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Sweet Company’s outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 2,000 shares of cumulative 4% preferred stock with a $100 par value and 12,000 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 4,000 Year 2 $ 8,000 Year 3 $ 42,000 The total amount of dividends paid to preferred and common shareholders over the three-year period is: Multiple Choice...

Sweet Company’s outstanding stock consists of 1,900 shares of cumulative 5% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 1,900 shares of cumulative 5% preferred stock with a $100 par value and 10,900 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 2,900 Year 2 $ 6,900 Year 3 $ 36,500 The total amount of dividends paid to preferred and common shareholders over the three-year period is: Multiple Choice...

Sweet Company’s outstanding stock consists of 1,600 shares of cumulative 4% preferred stock with a $100...

Sweet Company’s outstanding stock consists of 1,600 shares of cumulative 4% preferred stock with a $100 par value and 11,600 shares of common stock with a $10 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. Dividends Declared & Paid Year 1 $ 3,600 Year 2 $ 7,600 Year 3 $ 40,000 The amount of dividends paid to preferred and common shareholders in year 3 is: Multiple Choice $40,000 preferred;...