Question

On January 1, 2017, Shamrock Industries had stock outstanding as follows.

6% Cumulative preferred stock, $100 par value, issued and outstanding 9,100 shares		$910,000
Common stock, $10 par value, issued and outstanding 209,000 shares		2,090,000

To acquire the net assets of three smaller companies, Shamrock authorized the issuance of an additional 162,000 common shares. The acquisitions took place as shown below.

Date of Acquisition		Shares Issued
Company A April 1, 2017		50,400
Company B July 1, 2017		80,400
Company C October 1, 2017		31,200

On May 14, 2017, Shamrock realized a $92,400 (before taxes) insurance gain on discontinued operations.

On December 31, 2017, Shamrock recorded income of $307,200 from continuing operations (after tax).

Assuming a 50% tax rate, compute the earnings per share data that should appear on the financial statements of Shamrock Industries as of December 31, 2017. (Round answer to 2 decimal places, e.g. $2.55.)

Shamrock Industries Income Statement
		$
		$

Answer 1

Answer:

Income Statement for the year ended 31st december 2017

Net income from continuing operation before income tax: $307200
Income tax expense: $307200* 50% = $153600
Net income before extraordinary item: $307200- $153600 = $153600
Extraordinary gain (net of tax): $92400* (100% - 50%) = $46200
Net income: $153600+$46200 = $199800

Preferred dividend: 910000* 6% = $54600
Income allocatable to common, before extraordinary: $153600- $54600= $99000
Income allocatable to common, after extraordinary: $199800- $54600= $145200
Number of common outstanding, weighted average: 294800 shares
209000 * 12/12 = 209000
50400 * 9/12 =　37800
80400 * 6/12 =　40200
31200 * 3/12 =　7800
Total　　　　　　　　294800