For the year ended December 31, Global Exports had net sales of $7,750,000, costs and otherexpenses (including income tax) of $6,200,000, and an extraordinary gain (net of income tax) of$420,000.a. Prepare a condensed income statement (including earnings per share), assuming that 910,000 shares of common stock were outstanding throughout the year. (A condensed income state-ment is illustrated in Exhibit 12–2 .) b. Which earnings per share figure is used in computing the price-earnings ratio for GlobalExports reported in financial publications such as The Wall Street Journal? Explain briefly.
For the year ended December 31, Global Exports had net sales of $7,750,000, costs and otherexpenses (including income tax) of $6,200,000, and an extraordinary gain (net of income tax) of$420,000.a. Prepare a condensed income statement (including earnings per share), assuming that 910,000 shares of common stock were outstanding throughout the year. (A condensed income state-ment is illustrated in Exhibit 12–2 .) b. Which earnings per share figure is used in computing the price-earnings ratio for GlobalExports reported in financial publications such as The Wall Street Journal? Explain briefly.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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For the year ended December 31, Global Exports had net sales of $7,750,000, costs and other
expenses (including income tax) of $6,200,000, and an extraordinary gain (net of income tax) of
$420,000.
a. Prepare a condensed income statement (including earnings per share), assuming that 910,000
shares of common stock were outstanding throughout the year. (A condensed income state-
ment is illustrated in Exhibit 12–2 .)
b. Which earnings per share figure is used in computing the price-earnings ratio for Global
Exports reported in financial publications such as The Wall Street Journal? Explain briefly.
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