Reporting EPS: Discontinued OperationsTaft Corporation had after-tax income from continuing operations of $11.4 million for 2020. Taft also reported a $2.09 million after-tax loss on the disposal of its textile subsidiary. Taft uses a calendar-year reporting period. Taft's capital structure consists of the following. Preferred stock: 170,000 shares of $100 par, 8% cumulative nonconvertible preferred stock issued in 2020. No dividends were declared in the current year.Common stock: Outstanding January 1, 2020, 4,271,865 shares, $1 par. Dividends of $1.00 per share were declared and paid in 2020. On July 1, 2020, a three-for-one stock split was declared and the shares were issued. Requireda. What type of capital structure does Taft have (simple or complex)?Simple structureb. Compute relevant EPS amounts.Note: Round earnings per share amounts to two decimal places.Income from ContinuingOperations Available to Weighted Avg. CommonShares Outstanding0 x sPerCommon StockholdersShareBasic EPSNet Income Available to Weighted Avg. CommonShares Outstanding0 x SPerCommon StockholdersShareBasic EPS0 xc. Show the EPS presentation for financial reporting.Basic EPSIncome from continuing operations11,400,000 xLoss from discontinued operations, net of tax2,090,000 xNet income

The following calculations are done in the records of Taft Corporation to show the change in EPS due to a change in operations of the company.Formula Sheet: Answer Sheet:

Answered: Reporting EPS: Discontinued Operations…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Reporting EPS: Discontinued Operations

Taft Corporation had after-tax income from continuing operations of $11.4 million for 2020. Taft also reported a $2.09 million after-tax loss on the disposal of its textile subsidiary. Taft uses a calendar-year reporting period. Taft's capital structure consists of the following.

Preferred stock: 170,000 shares of $100 par, 8% cumulative nonconvertible preferred stock issued in 2020. No dividends were declared in the current year.
Common stock: Outstanding January 1, 2020, 4,271,865 shares, $1 par. Dividends of $1.00 per share were declared and paid in 2020. On July 1, 2020, a three-for-one stock split was declared and the shares were issued.

Required
a. What type of capital structure does Taft have (simple or complex)?
Simple structure
b. Compute relevant EPS amounts.
Note: Round earnings per share amounts to two decimal places.
Income from Continuing
Operations Available to Weighted Avg. Common
Shares Outstanding
0 x s
Per
Common Stockholders
Share
Basic EPS
Net Income Available to Weighted Avg. Common
Shares Outstanding
0 x S
Per
Common Stockholders
Share
Basic EPS
0 x
c. Show the EPS presentation for financial reporting.
Basic EPS
Income from continuing operations
11,400,000 x
Loss from discontinued operations, net of tax
2,090,000 x
Net income

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