Pellegrini Construction's capital structure at December 31, 19X2, included 5,000 shares of ($ 2.50) preferred stock and

Question:

Pellegrini Construction's capital structure at December 31, 19X2, included 5,000 shares of \(\$ 2.50\) preferred stock and 130,000 shares of common stock. Common shares outstanding during 19X3 were 130,000 January through February; 119,000 during March; 121,000 April through October; and 128,000 during November and December. Income from continuing operations during \(19 \mathrm{X} 3\) was \(\$ 371,885\). The company discontinued a segment of the business at a gain of \(\$ 69,160\), and an extraordinary item generated a gain of \(\$ 49,510\). The board of directors of Pellegrini Construction has restricted \(\$ 280,000\) of retained earnings for expansion of the company's office facilities.

\section*{Required}

1. Compute Pellegrini's earnings per share. Start with income from continuing operations. Income and loss amounts are net of income tax.

2. Show two ways of reporting Pellegrini's retained earnings restriction. Retained earnings at December 31, 19X2, was \(\$ 127,800\), and total paid-in capital at December 31, 19X3, is \(\$ 524,610\). Pellegrini declared cash dividends of \(\$ 264,500\) during \(19 \mathrm{X} 3\).

Using a statement of stockbolders' equity

(Obj. 7)

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting

ISBN: 9780133118209

2nd Edition

Authors: Charles T. Horngren, Jr. Harrison, Walter T.

Question Posted: