action, what would Zambrano report as total retained earnings in its December 31
ID: 2432985 • Letter: A
Question
action, what would Zambrano report as total retained earnings in its December 31, 2017, balance sheet? E4-13 (LO4) (Earnings per Share) At December 31, 2016, Shiga Naoya Corporation had the following stock outstanding 10% cumulative preferred stock, $100 par, 107,500 shares $10,750,000 Common stock, $5 par, 4,000,00o shares 20,000,000 During 2017, Shiga Naoya did not issue any additional common stock. The following also occurred during 2017. Income from continuing operations before taxes $23.650,000 Discontinued operations (loss before taxes) Pleferred dividends declared Common dividends declared Effective tax rate $3,225,000 $1,075.0o0 $2,200,0oo 35% Instructions Compute earnings per share data as it should appear in the 2017 income statement of Shiga Naoya Corporation. (Round to two decimalExplanation / Answer
Answers
Income from Continuing Operations
Income from Discontinued Operation
Net Income
A = [*See Income Statement part below]
Income before Preferred Stock
$ 15,372,500.00
$ (4,353,750.00)
$ 11,018,750.00
B
Amount of Preferred Stock dividend
$ (1,075,000.00)
$ -
$ (1,075,000.00)
C = A – B
Income available for Common Stock
$ 14,297,500.00
$ (4,353,750.00)
$ 9,943,750.00
D
No. of weighted average common stock shares
$ 20,000,000.00
$ 20,000,000.00
$ 20,000,000.00
E = C/D
Basic Earnings per share
$ 0.71
$ (0.22)
$ 0.50
Earnings per share, as to be reported on Income Statement---
Income from Continuing Operating before Income Tax
$ 23,650,000.00
Income Tax Expense
$ 8,277,500.00
Income from Continuing Operations
$ 15,372,500.00
Discontinued Operations:
Loss from Discontinued Operation
$ (3,225,000.00)
Less: Applicable Income tax reduction
$ (1,128,750.00)
$ (4,353,750.00)
Net Income ( Loss)
$ 11,018,750.00
Earning per share
Income from Continuing Operations
$ 0.71
Income (Loss) from Discontinued Operation
$ (0.22)
Net Income (Loss)
$ 0.50
Income from Continuing Operations
Income from Discontinued Operation
Net Income
A = [*See Income Statement part below]
Income before Preferred Stock
$ 15,372,500.00
$ (4,353,750.00)
$ 11,018,750.00
B
Amount of Preferred Stock dividend
$ (1,075,000.00)
$ -
$ (1,075,000.00)
C = A – B
Income available for Common Stock
$ 14,297,500.00
$ (4,353,750.00)
$ 9,943,750.00
D
No. of weighted average common stock shares
$ 20,000,000.00
$ 20,000,000.00
$ 20,000,000.00
E = C/D
Basic Earnings per share
$ 0.71
$ (0.22)
$ 0.50
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