Chapter 2, Problem 1AP

Comparative Income Statements and Basic EPS Anoka Company reported the following selected items in the shareholders' equity section of its balance sheet on December 31, Year 3, and Year 4:     December 31   Year 4 Year 3 Preferred stock, 7%, 100 par, nonconvertible $50,000 $50,000 Common stock, $10 par 84,000 70,000   In addition, it listed the following selected pretax items as of December 31, Year 3 and Year 4:     December 31, Year 4   December 31, Year 3   Debit Credit   Debit Credit Sales   $140,000     $124,300 Income from discontinued operations   —     6,000 Cost of goods sold $80,000     $75,000   Operating expenses 20,000     18,000   Loss from discontinued operations 9,000     —     The preferred shares were outstanding during all of Year 3 and Year 4; annual dividends were declared and paid in each year. During Year 3, 2,000 common shares were sold for cash on October 4. During Year 4, a 20% stock dividend was declared and issued in early May.…

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