PLEASE NO SCREENSHOTS, NO PICTURES! The answer should be able to copy and paste.

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PLEASE NO SCREENSHOTS, NO PICTURES! The answer should be able to copy and paste... Thanks. E4-13 (LO4) (Earnings per Share) At December 31, 2016, Shiga Naoya Corporation had the following stock outstanding, 0% cumulative preferred stock, $100par, 107,500 shares $10,750,000 Common stock, $5 par, 4.000,000 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 $23,650,0o0 Discontinued operations (loss before taxes) $3,225,000 Preferred dividends declared Common dividends declared Effective tax rate $1,075,00o $2,200,0o0 35% Instructions Compute earnings per share data as it should appear in the 2017 income statement of Shiga Naoya Corporation. (Round to two decimal places.)

Explanation / Answer

SHIGA NAOYA CORPORATION

INCOME STATEMENT

DECEMBER 31, 2017

Net income:

Income from continuing operation before income tax 23,650,000

Income tax (35% * 23,650,000) 8,277,500

Income from continuing operations 15,372,500

Discontinued operations

Loss before taxes 3,225,000

Less applicable income tax (35%) 1,128,750 2,096,250

Net income 13,276,250

Preferred dividends declared 1075000

Weighted average common shares outstanding 4,000,000

Earnings per share:

Income from continuing operations

($15,372,500 - $ 1,075,000)/4,000,000 3.57

Discontinued operations, net of tax

($2,096,250/4,000,000) (0.52)

Net income   

($13,276,250 - $1,075,000)/4,000,000 3.05

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