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On January 1, 2012, Bailey Industries had stock outstanding as follows: 6% cumulative preferred stock, $100 par value issued and outstanding 10,000 shares = $1,000,000. common stock, $10 par value, issued and outstanding 10,000 shares = $2,000,000
To acquire the net assets of three smaller companies, Bailey authorized the issuance of an additional 170,000 common shares. The acquisitions took place as shown below:
Company A April 1, 2012 = 60,000 shares issued.
Company B July 1, 2012 = 80,000 shares issued.
Company C October 1, 2012 = 30,000 shares issued.
On May 14, 2012, Bailey realized a $90,000(before taxes) insurance gain on the expropriation of investments originally purchased in 2000. on December 31, 2012, Bailey recorded net income of $300,000 before tax and exclusive of the gain.
Instructions:
Assuming a 40% tax rate, compute the earnings per share data that should appear on the financial statements of Bailey Industries as of December 31, 2012. Assume that the expropriation is extraordinary.
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ATotal Number of shares to be used for calcilation of Basic earnings per share
Weghithed Number
Particulars
Date of issued
Number of share Weight
of share
Previous share issued
1.01.2012
10000
1...