On January 1, 2020, Lennon Industries had stock outstanding as follows. 6% Cumulative preferred stock, $100 par value, issued and outstanding 10,000 shares $1,000,000 Common stock, $10 par value, issued and outstanding 200,000 shares 2,000,000 To acquire the net assets of three smaller companies, Lennon authorized the issuance of an additional 160,000 common shares. The acquisitions took place as shown below. Date of Acquisition Shares Issued Company A April 1, 2020 50,000 Company B July 1, 2020 80,000 Company C October 1, 2020 30,000 On May 14, 2020, Lennon realized a $90,000 (before taxes) gain on discontinued operations. On December 31, 2020, Lennon recorded income of $300,000 from continuing operations. Instructions Assuming a 20% tax rate, compute the earnings per share data that should appear on the financial statements of Lennon Industries as of December 31, 2020.
On January 1, 2020, Lennon Industries had stock outstanding as follows. 6% Cumulative preferred stock, $100 par value, issued and outstanding 10,000 shares $1,000,000 Common stock, $10 par value, issued and outstanding 200,000 shares 2,000,000 To acquire the net assets of three smaller companies, Lennon authorized the issuance of an additional 160,000 common shares. The acquisitions took place as shown below. Date of Acquisition Shares Issued Company A April 1, 2020 50,000 Company B July 1, 2020 80,000 Company C October 1, 2020 30,000 On May 14, 2020, Lennon realized a $90,000 (before taxes) gain on discontinued operations. On December 31, 2020, Lennon recorded income of $300,000 from continuing operations. Instructions Assuming a 20% tax rate, compute the earnings per share data that should appear on the financial statements of Lennon Industries as of December 31, 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 1, 2020, Lennon Industries had stock outstanding as follows.
| 6% Cumulative |
$1,000,000
|
| Common stock, $10 par value, issued and outstanding 200,000 shares |
2,000,000
|
To acquire the net assets of three smaller companies, Lennon authorized the issuance of an additional 160,000 common shares. The acquisitions took place as shown below.
| Date of Acquisition | Shares Issued |
| Company A April 1, 2020 |
50,000
|
| Company B July 1, 2020 |
80,000
|
| Company C October 1, 2020 |
30,000
|
On May 14, 2020, Lennon realized a $90,000 (before taxes) gain on discontinued operations. On December 31, 2020, Lennon recorded income of $300,000 from continuing operations.
Instructions
Assuming a 20% tax rate, compute the earnings per share data that should appear on the financial statements of Lennon Industries as of December 31, 2020.
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