The market value of Farmington Corp.’s common shares was quoted at $54 per share at December 31, 2018, and 2017. Planetarium’s balance sheet for December 31, 2018, and 2017, and statement of income and retained earnings for the years then ended are presented below:
| Farmington Corp. | ||
| Balance Sheet | ||
| December 31 | ||
| 2018 ($) | 2017 ($) | |
| Assets: | ||
| Current assets: | ||
| Cash | 9,000,000 | 5,200,000 |
| Short-term investments | 17,200,000 | 15,400,000 |
| Accounts receivable (net) | 109,000,000 | 111,000,000 |
| Inventories, lower of cost or market | 122,000,000 | 140,000,000 |
| Prepaid expenses | 4,000,000 | 2,800,000 |
| Total current assets | 261,200,000 | 274,400,000 |
| Property, plant, and equipment (net) | 350,000,000 | 315,000,000 |
| Long-term receivables | 15,000,000 | 20,000,000 |
| Copyrights and patents (net) | 6,000,000 | 7,000,000 |
| Other assets | 8,000,000 | 9,100,000 |
| Total assets | 643,000,000 | 629,000,000 |
| Liabilities and Stockholders’ Equity: | ||
| Current liabilities: | ||
| Notes payable | 7,000,000 | 17,000,000 |
| Accounts payable | 55,000,000 | 52,000,000 |
| Accrued expenses | 27,500,000 | 30,000,000 |
| Income taxes payable | 1,500,000 | 2,000,000 |
| Current portion of long-term debt | 10,000,000 | 9,500,000 |
| Total current liabilities | 101,000,000 | 110,500,000 |
| Long-term debt | 180,000,000 | 190,000,000 |
| Deferred income taxes | 69,000,000 | 65,000,000 |
| Other liabilities | 15,000,000 | 9,500,000 |
| Total liabilities | 365,000,000 | 375,000,000 |
| Stockholders’ equity: | ||
| Common stock, par value $1; authorized 20,000,000 shares; issued and outstanding 12,000,000 shares | 12,000,000 | 12,000,000 |
| 10% cumulative preferred shares, par value $100; $100 liquidating value; authorized 100,000 shares; issued and outstanding 60,000 shares | 6,000,000 | 6,000,000 |
| Additional paid-in capital | 119,000,000 | 119,000,000 |
| Retained earnings | 141,000,000 | 117,000,000 |
| Total stockholders’ equity | 278,000,000 | 254,000,000 |
| Total liabilities and stockholders’ equity | 643,000,000 | 629,000,000 |
| Farmington Corp. | ||
| Statement of Income and Retained Earnings | ||
| Year ended December 31 | ||
| 2018 ($) | 2017 ($) | |
| Net sales | 540,000,000 | 500,000,000 |
| Cost and expenses: | ||
| Cost of goods sold | 390,900,000 | 400,000,000 |
| Selling, general, and administrative expenses | 70,000,000 | 65,000,000 |
| Other, net | 9,100,000 | 6,000,000 |
| Total costs and expenses | 470,000,000 | 471,000,000 |
| Income before income taxes | 70,000,000 | 29,000,000 |
| Income taxes | 21,000,000 | 11,600,000 |
| Net income | 49,000,000 | 17,400,000 |
| Retained earnings at beginning of period | 117,000,000 | 113,100,000 |
| Dividends on common stock | (24,400,000) | (12,900,000) |
| Dividends on preferred stock | (600,000) | (600,000) |
| Retained earnings at end of period | 141,000,000 | 117,000,000 |
Compute the Earnings per share for the year 2018.
