The shareholders’ equity section of Swifty Corporation as at December 31, 2020, follows:
| 10% cumulative preferred shares, 100,000 shares authorized, 81,000 shares outstanding | $4,500,000 |
| Common shares, 10 million shares authorized and issued | 10,000,000 |
| Contributed surplus | 10,700,000 |
| 25,200,000 | |
| Retained earnings | 181,000,000 |
| $206,200,000 |
Net income of $25 million for 2020 reflects a total effective tax rate of 26%. Included in the net income figure is a loss of $16 million (before tax) relating to the operations of a business segment that is to be discontinued.
Calculate earnings per share information as it should appear in the financial statements of Swifty Corporation for the year ended December 31, 2020.
Use the data given below.
| Bonds payable, 10% (issued at face amount) | $2,500,000 |
| Preferred $2 stock, $20 par | $2,500,000 |
| Common stock, $25 par | $2,500,000 |
Income tax is estimated at 40% of income.
Determine the earnings per share on common stock, assuming that the income before bond interest and income tax is (a) $1,125,000, (b) $1,375,000, and (c) $1,625,000.
Peter Wong Corporation had a net income reported for 2014 of $880,000. During 2014, dividends of $120,000 were declared on preferred stock, and dividends of $200,000 were declared on common stock. There were no changes in the 200,000 shares of common stock or the 40,000 shares of preferred stock outstanding during 2014. The earnings per share to be reported for 2014 is:
a. $4.40
b. $3.80
c. $3.67
d. $2.80
