Aerostar, Inc., operates as a retailer of casual apparel. A recent, condensed income statement for Aerostar follows:

Requirements
1. Assume that the following transactions were inadvertently omitted at the end of the year. Using the categories in the table, indicate the effect of each of the transactions on each category. (Use + for increase, ˆ’ for decrease, and NE for no effect). Provide dollar amounts for each column except Earnings per Share.

a. Purchased inventory on account from a German company. The price was 100,000 euros. The exchange rate of the euro was $1.47.
b. Sold inventory on account, $120,000 (cost of inventory, $75,000).
c. Corrected a $50,000 overstatement of depreciation expense from a previous year.
d. Paid the German company for the inventory purchased when the exchange rate was $1.50.
e. Distributed 5,000 shares in a 10% stock dividend. The market value of the stock was $50.
f. Recorded additional administrative expense, $5,000.
g. Recorded interest earned, $20,000.
h. Declared dividends on preferred stock, $50,000.
i. Issued additional 5,000 shares of common stock, $260,000.
2. Determine the amount of Operating Income, Income Before Tax, Net Income, and Earnings Per Share after recording thesetransactions.

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Income Statement For the Year Ended January 31,2012 Sales revenue $2,400,000 Operating expenses: Cost of goods sold $1,500,000 Selling and administrative expenses Operating income Other revenue (expenses) Income before tax Income tax expense (40% tax rate) Net income Earnin 500,002,000,000 400,000 50,000 450,000 180,000 S 270,000 5.40 share (50,000 shares) Transaction Operating Income Net Income Earnings per Income Before Tax Share Unadjusted balances 400,000 450,000 270,000 Totals