Homework SourseThe following information is related to Stellar Company for
The following information is related to Stellar Company for 2017.
Stellar Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Stellar sold the wholesale operations to Rogers Company. During 2017, there were 463,400 shares of common stock outstanding all year.
I only need to modify two places.
income from continuing opeartations and net income. please give me equation? thank you
| Retained earnings balance, January 1, 2017 | $981,230 | |
| Sales Revenue | 26,181,600 | |
| Cost of goods sold | 16,144,500 | |
| Interest revenue | 71,400 | |
| Selling and administrative expenses | 4,762,000 | |
| Write-off of goodwill | 836,600 | |
| Income taxes for 2017 | 1,343,100 | |
| Gain on the sale of investments | 117,400 | |
| Loss due to flood damage | 395,000 | |
| Loss on the disposition of the wholesale division (net of tax) | 449,000 | |
| Loss on operations of the wholesale division (net of tax) | 97,610 | |
| Dividends declared on common stock | 229,300 | |
| Dividends declared on preferred stock | 81,500 |
Solution
Answer
Income from Continuing Operations = $ 2,889,200 (less) Preferred stock dividend $ 81,500 = $ 2,807,700
Total common stock shares outstanding = 463,400 shares
Earning per share amount for “ Income from Continuing Operations” = $ 2,807,700 / 463,400 shares = 6.0589…..
Hence, correct figure = $ 6.06
Net Income / (Loss) = $ 2,342,590
Preference Stock Dividend = $ 81,500
Earnings available for Common Stock holders = $ 2,342,590 – $ 81,500 = $ 2,261,090
Earning per share = $ 2,261,090 / 463,400 shares outstanding = 4.879348….
Hence, correct figure = $ 4.88
