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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TomShelby TomShelby · Answer 1 · 2019-10-03T06:31:23+02:00

Answer:

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

anthougo anthougo · Answer 2 · 2021-09-13T15:00:54+02:00

Computation of Earnings per Share Data for the Income Statement of Shiga Naoya Corporation for the year 2020 is as follows:

Income from continuing operations $23,650,000

Less Loss from discontinued operations ($ 3,225,000)

Income before taxes $20,425,000

Income Tax (17% x $20,425,000) (3,472,250)

Net Income $16,952,750

Preferred stock dividends $ 1,075,000

Earnings after preferred dividends $15,877,750

Common stock dividends $ 2,200,000

Earnings added to Retained Earnings $13,677,750

Earnings per share = Earnings available to common stockholders/number of common stock shares

= $3.97 ($15,877,750/4,000,000)

Thus, the Earnings per share for Shiga Naoya Corporation for 2020 = $3.97.

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