Lyon Company shows the following condensed income statement information for the
ID: 2757176 • Letter: L
Question
Lyon Company shows the following condensed income statement information for the year ended December 31, 2013:
Lyon declared dividends of $6,000 on preferred stock and $17,280 on common stock. At the beginning of 2013, 10,000 shares of common stock were outstanding. On May 4, 2013, the company issued 2,000 additional common shares, and on October 19, 2013, it issued a 20% stock dividend on its common stock. The preferred stock is not convertible.
Required:
1) Compute the 2013 basic earnings per share. If required, round your answer to the nearest cent.
$ per share
Show the 2013 income statement disclosure of basic earnings per share. If required, round your answers to the nearest cent.
This is my fourth post on this question.
2) Income before extraordinary items $ per share 3) Extraordinary loss per share 4) Net income $ per share Income before extraordinary items Less: Extraordinary loss (net of income tax credit) Net income $29,936 (2,176 $27,760Explanation / Answer
1) Basic Earnings Per Share for 2013 = $1.60 (21760/13591.24)
2) Income Statement disclosure of the basic EPS for 2013 would appear as under:
Income before extraordinary items = $1.76 (23936/13591.24)
Extraodinary loss = ($0.16) (2176/13591.24)
Net Income = $1.60 (21760/13591.24)
Calculation of Weighted Average no of shares:
1.1.2013 to 5.3.2013 10000*1.2 = 12000 shares for 123 days
5.4.2013 to 12.31.2013 = 12000 + 2000*1.2 = 14400 shaares for 242 days
weighted average will be 12000*123/365 + 14400*242/365 = 4043.84 + 9547.40 = 13591.24 shares
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