On January 1, 2014, Lennon Industries had stock outstanding as follows. To acqui

Question

On January 1, 2014, Lennon Industries had stock outstanding as follows. To acquire the net assets of three smaller companies, Lennon authorized the issuance of an additional 256,800 common shares. The acquisitions took place as shown below. On May 14, 2014, Lennon realized a $127,200 (before taxes) insurance gain on the expropriation of investments originally purchased in 2000. On December 31, 2014, Lennon recorded net income of $405,600 before tax and exclusive of the gain. Assuming a 44% tax rate, compute the earnings per share data that should appear on the financial statements of Lennon Industries as of December 31, 2014. Assume that the expropriation is extraordinary. (Round answer to 2 decimal places, e.g. $2.55.)

Explanation / Answer

Lennon Industries

Income Statement

Particulars Amount Net income during the year 405,600 Insurance Gain 127,200 Total 532,800 Less Taxes 44% - 234,432 Net income after taxes 298,368

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