Homework SourseExercise 1620 On January 1 2017 Tamarisk Industries had stoc
Exercise 16-20
On January 1, 2017, Tamarisk Industries had stock outstanding as follows.
To acquire the net assets of three smaller companies, Tamarisk authorized the issuance of an additional 162,000 common shares. The acquisitions took place as shown below.
Date of Acquisition
Shares Issued
On May 14, 2017, Tamarisk realized a $92,400 (before taxes) insurance gain on discontinued operations.
On December 31, 2017, Tamarisk 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 Tamarisk Industries as of December 31, 2017. (Round answer to 2 decimal places, e.g. $2.55.)
| 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 |
Solution
Tamarisk Industries
| Date | No.of shares | O/s for (days)/365(till the next date of issue | Col.2*4 | |
| Jan1,2017 | 209000 | (365-31-28-31)/365= | 0.7534 | 157466 |
| Apr 12017 | 259400 | (30+31+30)/365= | 0.2493 | 64672 |
| July 1 2017 | 339800 | (31+31+30)/365= | 0.2521 | 85648 |
| Oct.1 2017 | 371000 | (31+30+31)/365= | 0.2521 | 93512 |
| 1.5068 | 401299 | |||
| Weighted av. No. of equity shares outstanding = | 266316 |
