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.)

Question

Business

Colin Cervantes

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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Katrina Carr · Answer 1

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