On January 1, 2023, Cullumber Limited had shares outstanding as follows: 5% cumulative preferred shares, $100 par value, 10,000 shares issued and outstanding Common shares, 201,000 shares issued and outstanding $1,000,000 2,010,000 To acquire the net assets of three smaller companies, the company authorized the issuance of an additional 306,000 common shares. The acquisitions were as follows:
On January 1, 2023, Cullumber Limited had shares outstanding as follows: 5% cumulative preferred shares, $100 par value, 10,000 shares issued and outstanding Common shares, 201,000 shares issued and outstanding $1,000,000 2,010,000 To acquire the net assets of three smaller companies, the company authorized the issuance of an additional 306,000 common shares. The acquisitions were as follows:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2023, Cullumber Limited had shares outstanding as follows:
5% cumulative preferred shares, $100 par value, 10,000 shares issued and outstanding
Common shares, 201,000 shares issued and outstanding
To acquire the net assets of three smaller companies, the company authorized the issuance of an additional 306,000 common shares.
The acquisitions were as follows:
Date of Acquisition
Company A: April 1, 2023
Company B: July 1, 2023
Company C: October 1, 2023
$1,000,000
2,010,000
Shares Issued
164,000
83,000
59,000
On May 14, 2023, Cullumber realized a $99,000 gain (before tax) on a discontinued operation from a business segment that had
originally been purchased in 2003.
On December 31, 2023, the company recorded income of $685,000 before tax, not including the discontinued operation gain.
Cullumber has a 30% tax rate.
C. Assume that Cullumber declared a 1-for-2 reverse stock split on February 10, 2024, and that the
company's financial statements for the year ended December 31, 2023, were issued on February
28, 2024.
D. Calculate earnings per share for 2023 as it should be reported to shareholders
Income before gain from discontinued operations
Discontinued operations gain net of tax
Net income
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