Illustration: Lancer, Inc. reports net income of $350,000. It declares and pays preferred dividends of $50,000 for the year. The weighted-average number of common shares outstanding during the year is 100,000 shares. Lancer computes earnings per share as follows:Earnings per ShareEarnings per Share- $50,000$350,000100,000=$3.00per shareLO 5 Identify where to report earnings per share information.Net Income - Preferred Dividends Weighted Average of Common Shares OutstandingAdvance slide in presentation mode to reveal answers.
4-26 Earnings per Share Earnings per Share ILLUSTRATION 4-14 Income Statement LO 4
4-27 BE4-4. Finley Corporation had income from continuing operations of $10,600,000 in 2017. During 2017, it disposed of its restaurant division at an after-tax loss of $189,000. Prior to disposal, the division operated at a loss of $315,000 (net of tax) in 2017 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Finley had 10,000,000 shares of common stock outstanding during 2017. Prepare a partial income statement for Finley beginning with income from continuing operations. 504,000 )*
4-28 E4-13 Shiga Naoya Corporation E4-13 Shiga Naoya Corporation Class example Class example
4-29 BE4-5 . Stacy Corporation had income from operations of $7,200,000. In addition, it suffered an unusual and infrequent pretax loss of $770,000 from a volcano eruption, interest revenue of $17,000, and a write-down on buildings of $53,000. The corporation's tax rate is 30%. Prepare a partial income statement for Stacy beginning with Income from operations. The corporation had 5,000,000 shares of common stock outstanding during 2017. Income from operations $7,200,000 Other Revenues and Gains Interest revenue 17,000 7,217,000 Other Expenses and Losses Loss due to volcano eruption 770,000 Impairment loss - building 53,000 Income before income tax 6,394,000 Income tax ($6,394,000 X .30) 1,918,200 Net income $4,475,800 Per share of common stock: Net income ($4,475,800 ÷ 5,000,000) $ .90
4-30 When a company owns substantial interests (generally > 50%) in another company, GAAP requires that the financial statements of both companies be consolidated together into one set of financials. Noncontrolling interest is the portion of equity (net assets) interest in a subsidiary not attributable to the parent company. Noncontrolling Interest LO 4 Explain how to report various income items. Reporting Various Income Items Reporting Various Income Items
4-31 Illustration: Assume that Coca-Cola acquires over 50 percent of the outstanding stock of Koch Company. Because Coca-Cola owns more than 50 percent of Koch, it consolidates Koch’s financial results with its own. GAAP requires that net income be allocated to the controlling and noncontrolling interest.
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