The following information is related to Stellar Company for 2017. Stellar Compan
ID: 2407865 • Letter: T
Question
The following information is related to Stellar Company for 2017.
Stellar Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Stellar sold the wholesale operations to Rogers Company. During 2017, there were 463,400 shares of common stock outstanding all year.
I only need to modify two places.
income from continuing opeartations and net income. please give me equation? thank you
Retained earnings balance, January 1, 2017 $981,230 Sales Revenue 26,181,600 Cost of goods sold 16,144,500 Interest revenue 71,400 Selling and administrative expenses 4,762,000 Write-off of goodwill 836,600 Income taxes for 2017 1,343,100 Gain on the sale of investments 117,400 Loss due to flood damage 395,000 Loss on the disposition of the wholesale division (net of tax) 449,000 Loss on operations of the wholesale division (net of tax) 97,610 Dividends declared on common stock 229,300 Dividends declared on preferred stock 81,500 Income Tax 1343100 Income from Continuing Operations 2889200 Discontinued Operations Loss on Disposal, Net of Tax 449000 Loss on Operations, Net of Tax 97610 546610 2342590 Net Income/ (Loss) Earnings Per Share Income from Continuing Operations 9.13 Discontinued Operations Loss on Disposal, Net of Tax 0.97 Loss on Operations, Net of Tax 0.21 1.18 5.06 Net Income/ (Loss)Explanation / Answer
Answer
Income from Continuing Operations = $ 2,889,200 (less) Preferred stock dividend $ 81,500 = $ 2,807,700
Total common stock shares outstanding = 463,400 shares
Earning per share amount for “ Income from Continuing Operations” = $ 2,807,700 / 463,400 shares = 6.0589…..
Hence, correct figure = $ 6.06
Net Income / (Loss) = $ 2,342,590
Preference Stock Dividend = $ 81,500
Earnings available for Common Stock holders = $ 2,342,590 – $ 81,500 = $ 2,261,090
Earning per share = $ 2,261,090 / 463,400 shares outstanding = 4.879348….
Hence, correct figure = $ 4.88
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