Exercise 16-20 On January 1, 2017, Tamarisk Industries had stock outstanding as

Question

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

Explanation / Answer

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

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