(LO 4) (EPS: Simple Capital Structure) A portion of the statement of income and retained earnings ofPierson Inc. for the current year follows.Income from continuing operationsLoss on discontinued operations, net of applicable income tax (Note 1)Net incomeRetained earnings at the beginning of the year$15,000,0001,340,00013,660,00083.250,00096,910,000Dividends declared:On preference shares-S6.00 per shareOn ordinary shares-S.75 per shareRetained earnings at the end of the year$300,00014.875.00015 175,000S81,735,000Note 1. During the rear, Pierson Inc. had a loss from discontinued operations of Sa.340,00o after applicableincome tax reduction of S1 200.000.At the end of the current year, Pierson Inc has outstanding 8.000.000 shares of S1o par ordinary shares and 50,000shares of 6% preference shares.On April 1 of the current year. Pierson Inc. issued 1000.o00 ord nary shares for S32 per share to help recover from theloss on discontinued operations.InstructionsCompute the earnings per share on ordinay shares fer the curentvear as it should be reported to shareholders.

Earnings available for common stockholders: Amount (P) Income from continuing operation…

(LO 4) (EPS: Simple Capital Structure) A portion of the statement of income and retained earnings of Pierson Inc. for the current year follows. Income from continuing operations Loss on discontinued operations, net of applicable income tax (Note 1) $15,000,000 1,340,000 Net income 13,660,000 Retained earnings at the beginning of the year 83.250,000 96,910,000 Dividends declared: On preference shares-$6.00 per share On ordinary shares-$.75 per share Retained earnings at the end of the year $ 300,000 14.875.000 15,175,000 $81.735,000 Note 1. During the year. Pierson Inc. had a loss from discontinued operations of S1.340,00o after applicable income tax reduction of S1.200.000. At the end of the current year. Pierson Inc. has outstanding 8.000.000 shares of S10 par ordinary shares and 50,000 shares of 6% preference shares. On April 1 of the current year. Pierson Inc ssued 1.000.o00 ordinary shares for S32 per share to help recover from the loss on discontinued operations.

(LO 4) (EPS: Simple Capital Structure) A portion of the statement of income and retained earnings of Pierson Inc. for the current year follows. Income from continuing operations Loss on discontinued operations, net of applicable income tax (Note 1) $15,000,000 1,340,000 Net income 13,660,000 Retained earnings at the beginning of the year 83.250,000 96,910,000 Dividends declared: On preference shares-$6.00 per share On ordinary shares-$.75 per share Retained earnings at the end of the year $ 300,000 14.875.000 15,175,000 $81.735,000 Note 1. During the year. Pierson Inc. had a loss from discontinued operations of S1.340,00o after applicable income tax reduction of S1.200.000. At the end of the current year. Pierson Inc. has outstanding 8.000.000 shares of S10 par ordinary shares and 50,000 shares of 6% preference shares. On April 1 of the current year. Pierson Inc ssued 1.000.o00 ordinary shares for S32 per share to help recover from the loss on discontinued operations.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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