The net income reported on the income statement of Goth Co. was $3,800,000. Ther

Question

The net income reported on the income statement of Goth Co. was $3,800,000. There were 50,000 shares of $20 par common stock and 20,000 shares of $3 preferred stock outstanding throughout the current year. The income statement included two extraordinary items: a $760,000 gain from condemnation of land and a $290,000 loss arising from flood damage, both after applicable income tax.

a. Determine the per-share figure for common stock for income before extraordinary items. Round your answer to the nearest cent. $ per share

b. Determine the per-share figure for common stock for net income. Round your answer to the nearest cent. $ per share

Explanation / Answer

a. Per-share figure for common stock for income before extraordinary items is as calculated below:

b. Per-share figure for common stock for net income is as calculated below:

Goth Co. Income Statement For the year ended December 31, 20XX Income before extraordinary items 3,800,000 Extraordinary item: Gain from condemnation of land 760,000 Loss from flood damage -290,000 Net income 4,270,000 Per share Income before extraordinary items (3,800,000/50,000) 76

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