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How do you set this up in Excel? Gallant Company reported net income of $2,500,000. The...

How do you set this up in Excel?

Gallant Company reported net income of $2,500,000. The income statement included a $500,000 gain from condemnation of land and a $200,000 loss on discontinued operations, both after applicable income tax. There were 100,000 shares of $10 par common stock and 40,000 shares of 4% preferred stock of $100 par outstanding throughout the current year.

Prepare the earnings per share section of Gallant Company’s income statement.

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Answer #1

Answer-

GALLANT COMPANY
INCOME STATEMENT
EARNING PER SHARE SECTION
PARTICULARS AMOUNT
$
Income from continuing operations 20.4
Less- Loss on discontinued operations
($200000/100000 shares) 2.00
Income before extraordinary items 18.40
Extraordinary items:-
Add- Gain on condemnation 5.00
($500000/100000 shares)
Net Income 23.40

Explanation-Earnings per share on common stock = (Income from continuing operations – Preferred Dividends) / Weighted Average number of Common shares outstanding

= ($2200000-$160000)/100000 shares

= $20.40 per share

Where- Income from continuing operations= Net Income+ Loss on discontinued operations – Gains on condemnation

= $2500000+200000-$500000

= $2200000

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