ACC/423 Calculating Earnings Per Share - 63798

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rmodene

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On January 1, 2012, Bailey Industries had stock outstanding as follows.

6% Cumulative preferred stock, $103 par value,
   issued and outstanding 10,100 shares

 

$1,040,300

Common stock, $11 par value, issued and
   outstanding 283,200 shares

 

3,115,200


To acquire the net assets of three smaller companies, Bailey authorized the issuance of an additional 249,600 common shares. The acquisitions took place as shown below.

Date of Acquisition

 

Shares Issued

Company A April 1, 2012

 

92,400

Company B July 1, 2012

 

115,200

Company C October 1, 2012

 

42,000

 


On May 14, 2012, Bailey realized a $124,800 (before taxes) insurance gain on the expropriation of investments originally purchased in 2000.

On December 31, 2012, Bailey recorded net income of $364,800 before tax and exclusive of the gain.

Assuming a 47% tax rate, compute the earnings per share data that should appear on the financial statements of Bailey Industries as of December 31, 2012. Assume that the expropriation is extraordinary. 
(Round answer to 2 decimal places, e.g. $2.55.)

Solution Description

Bailey Industries
Income Statement
For the year ended December 31, 2012

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