At the end of 2013, Shiga Naoya Corporation had outstanding 10% cumulative preferred stock of 109,250 shares worth $10,925,000 and common stock of 4,090,000 shares worth $20,450,000. In 2014, Shiga Naoya did not issue any additional stock and reported net income from continuing operations of $23,735,000 and a net loss from discontinued operations of $3,322,000.

1. At December 31, 2013, Shiga Naoya Corporation had the following stock outstanding.
During 2014, Shiga Naoya did not issue any additional common stock. The following also
occurred during 2014.
Compute earnings per share data as it should appear in the 2014 income statement of Shiga
Naoya Corporation. (Round answers to 2 decimal places, e.g. 1.48.)
a. Net Income / (Loss)Discontinued OperationsIncome from Continuing Operations
b. Income from Continuing OperationsNet Income / (Loss)Discontinued Operations
$_____________
$______________
10% cumulative preferred stock, $100 par, 109,250 shares $10,925,000
Common stock, $5 par, 4,090,000 shares 20,450,000
Solution
Earnings per share= Net Income-Preferred dividends/no of shares
Net Income=(Income from continuing operation-loss on discontinued operation)*(1-Tax)
Net Income=(23735000-3322000)*(1-0.35)= 13268450
Earnings per share= Net Income-Preferred dividends/no of shares
Earnings per share= (13268450-1092500)/20450000=0.595401