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26 August, 09:20

At December 31, 2019, Shiga Naoya Corporation had the following stock outstanding. 10% cumulative preferred stock, $100 par, 107,500 shares $10,750,000 Common stock, $5 par, 4,000,000 shares 20,000,000 During 2020, Shiga Naoya did not issue any additional common stock. The following also occurred during 2020. Income from continuing operations before taxes $23,650,000 Discontinued operations (loss before taxes) $ 3,225,000 Preferred dividends declared $ 1,075,000 Common dividends declared $ 2,200,000 Effective tax rate 17% Instructions Compute earnings per share data as it should appear in the 2020 income statement of Shiga Naoya Corporation. (Round to two decimal places.)

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  1. 26 August, 10:04
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    EPS = 3.977

    Explanation:

    income before taxes 23,650,000

    discontinued operation (3,225,000)

    EBT 20,425,000

    tax expense (3,441,650)

    net income 16.983.350‬

    earning per share:

    (net income - preferred dividends) / average shares outstanding

    107,500 x 100 x 10% = 1.075.000‬

    16,983,350 - 1,075,000 = 15.908.350‬

    outstanding shares: 15,908,350 / 4,000,000 = 3,9770875 = 3.977
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