Exercise 16-20 Date of Acquisition Shares Issued Lennon Industries Income Statem

ID: 2424849 • Letter: E

Question

Exercise 16-20

Date of Acquisition

Shares Issued

Lennon Industries
Income Statement
For the year ended December 31, 2014

Exercise 16-20

Your answer is partially correct. Try again. On January 1, 2014, Lennon Industries had stock outstanding as follows.
6% Cumulative preferred stock, $105 par value, issued and outstanding 10,800 shares $1,134,000 Common stock, $10 par value, issued and outstanding 285,600 shares 2,856,000
To acquire the net assets of three smaller companies, Lennon authorized the issuance of an additional 229,200 common shares. The acquisitions took place as shown below.

Date of Acquisition

Shares Issued

Company A April 1, 2014 92,400 Company B July 1, 2014 111,600 Company C October 1, 2014 25,200
On May 14, 2014, Lennon realized a $129,600 (before taxes) insurance gain on the expropriation of investments originally purchased in 2000.

On December 31, 2014, Lennon recorded net income of $304,800 before tax and exclusive of the gain.

Assuming a 41% tax rate, compute the earnings per share data that should appear on the financial statements of Lennon Industries as of December 31, 2014. Assume that the expropriation is extraordinary. (Round answer to 2 decimal places, e.g. $2.55.)

Lennon Industries
Income Statement
For the year ended December 31, 2014

DividendsExpensesExtraordinary LossExtraordinary GainIncome Before Extraordinary ItemIncome From Continuing OperationsIncome Per Share Before Extraordinary ItemLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues

Explanation / Answer

Lennon Industries

Income Statement

For the year ended December 31, 2014

Income Before Extraordinary Item

304800

Extraordinary Gain

129600

Total Revenues before tax

434400

Less –tax @41%

178104

Total revenues December 31

256296