Extreme Company reported the following information about its stock on its December 31, 2016, balance sheet: Preferred stock, $2 par value, 5% cumulative, 300,000 shares authorized, 120,000 shares issued $240,000 and outstanding Common stock, $1 par value, 500,000 shares authorized, 240,000 shares issued and outstanding 240,000 The following amounts were taken from Extreme's income statement: Income from continuing operations before income taxes $680,000 Income tax expense (204,000) Income from continuing operations $476,000 Loss from discontinued operations, net of $13,000 tax benefit (36,000) Net income $440,000 The only stock issued during 2016 was 80,000 shares of common stock issued on June 30, 2016. No dividends were declared during 2016. Required: 1. Calculate all earnings per share amounts for 2016. If required, round your answer to two decimals. per share 2. If the preferred stock is cumulative, the dividend for the current period taken into account while calculating earning per share. If the preferred stock is not cumulative, the dividend taken into account only if it has been declared.
Extreme Company reported the following information about its stock on its December 31, 2016, balance sheet: Preferred stock, $2 par value, 5% cumulative, 300,000 shares authorized, 120,000 shares issued $240,000 and outstanding Common stock, $1 par value, 500,000 shares authorized, 240,000 shares issued and outstanding 240,000 The following amounts were taken from Extreme's income statement: Income from continuing operations before income taxes $680,000 Income tax expense (204,000) Income from continuing operations $476,000 Loss from discontinued operations, net of $13,000 tax benefit (36,000) Net income $440,000 The only stock issued during 2016 was 80,000 shares of common stock issued on June 30, 2016. No dividends were declared during 2016. Required: 1. Calculate all earnings per share amounts for 2016. If required, round your answer to two decimals. per share 2. If the preferred stock is cumulative, the dividend for the current period taken into account while calculating earning per share. If the preferred stock is not cumulative, the dividend taken into account only if it has been declared.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Earnings per Share Disclosure
Extreme Company reported the following information about its stock on its December 31, 2016, balance sheet:
Preferred stock, $2 par value, 5% cumulative, 300,000 shares authorized, 120,000 shares issued
$240,000
and outstanding
Common stock, $1 par value, 500,000 shares authorized, 240,000 shares issued and outstanding
240.000
The following amounts were taken from Extreme's income statement:
Income from continuing operations before income taxes
$680,000
Income tax expense
(204,000)
Income from continuing operations
$476,000
Loss from discontinued operations, net of $13,000 tax benefit (36,000)
Net income
$440,000
The only stock issued during 2016 was 80,000 shares of common stock issued on June 30, 2016. No dividends were declared during 2016.
Required:
1. Calculate all earnings per share amounts for 2016. If required, round your answer to two decimals.
$
per share
2. If the preferred stock is cumulative, the dividend for the current period
taken into account while calculating earning per share.
If the preferred stock is not cumulative, the dividend
taken into account only if it has been declared.
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