Exercise 4-13 At December 31, 2016, Culver Corporation had the following stock outstanding. 10% cumulative preferred...

Exercise 4-13

At December 31, 2016, Culver Corporation had the following stock outstanding.

10% cumulative preferred stock, $100 par, 108,612 shares		$10,861,200
Common stock, $5 par, 4,060,980 shares		20,304,900

During 2017, Culver did not issue any additional common stock. The following also occurred during 2017.

Income from continuing operations before taxes	$24,647,300
Discontinued operations (loss before taxes)	$3,285,900
Preferred dividends declared	$1,086,120
Common dividends declared	$2,248,400
Effective tax rate	35	%

Compute earnings per share data as it should appear in the 2017 income statement of Culver Corporation. (Round answers to 2 decimal places, e.g. 1.48.)

Solutions

Expert Solution

Net income

Income before income tax $24,647,300

Income tax (35% X $24,647,300) 86,26,555

Income from continuing operations 1,60,20,745

Discontinued operations

Loss before income tax $3,285,900

Less: Applicable income tax (35%) 11,50,065 (21,35,835)

Net income 1,38,84,910

Preference dividends declared: 10,86,120

Weighted average shares outstanding 40,60,980

Earnings per share

Income from continuing operations $3.68*

Discontinued operations, net of tax (0.53)**

Net income $3.15***

*(1,60,20,745 – 10,86,120) ÷ 40,60,980

**21,35,835 / 40,60,980

***(1,38,84,910 - 10,86,120) ÷ 40,60,980

ekkarill92 answered 1 year ago

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