Question

The shareholders’ equity section of Riverbed Corporation as at December 31, 2020, follows: 10% cumulative preferred...

The shareholders’ equity section of Riverbed Corporation as at December 31, 2020, follows:

10% cumulative preferred shares, 100,000 shares authorized, 65,000 shares outstanding $4,300,000
Common shares, 10 million shares authorized and issued 10,000,000
Contributed surplus 11,000,000
25,300,000
Retained earnings 176,000,000
$201,300,000


Net income of $25 million for 2020 reflects a total effective tax rate of 26%. Included in the net income figure is a loss of $16 million (before tax) relating to the operations of a business segment that is to be discontinued.

Calculate earnings per share information as it should appear in the financial statements of Riverbed Corporation for the year ended December 31, 2020. (Round answers to 2 decimal places, e.g. 52.75.)

Earnings per share

Continuing Operations

 $enter a dollar amount rounded to 2 decimal places

Discontinued Operations

 enter a dollar amount rounded to 2 decimal places

Net Income / (Loss)

 $enter a total amount
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Answer #1
Continuing Operation
Loss from discontinued operations $16,000,000
Less: Income Tax (16,000,000*26%) $4,160,000
Loss from discontinued operations net of tax $11,840,000
   .
Net Income $26,000,000
Add: Loss from discontinued operations net of tax $11,840,000
Income from continuing operations 36,840,000
.
Preference Dividend (10% * 4,300,000) $430,000
Earning
Per
Share
Income from continuing operations (36,840,000 - 430,0000 / 10,000,000) 3.64
Loss from discontinued operations net of tax (11,840,000 / 10,000,000) (1.18)
Net Income/ loss (26,000,000 - 430,0000) / 10,000,000) 2.56
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