P3–5 Calculation of EPS and retained earnings Everdeen Mining, Inc., ended 2015 with a net profit before taxes of $436,000. The company is subject to a 40% tax rate and must pay $64,000 in preferred stock dividends before distributing any earnings on the 170,000 shares of common stock currently outstanding.

a. Calculate Everdeen’s 2015 earnings per share (EPS).

b. If the firm paid common stock dividends of $0.80 per share, how many dollars would go to retained earnings?

P3–6 Balance sheet preparation Use the appropriate items from the following list to prepare in good form Mellark’s Baked Goods balance sheet at December 31, 2015.

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Item Accounts payable Value ($000) at December 31, 2015 Item $ 220 Inventories Value (5000) at December 31, 2015 $ 375 Accounts receivable 450 Land 100 Accruals 55 Long-term debts 420 Accumulated depreciation 265 Machinery 420 Buildings 225 Marketable securities 75 Cash 215 Notes payable 475 Common stock (at par) 90 Paid-in capital in excess Cost of goods sold 2,500 of par 360 Depreciation expense 45 Preferred stock 100 Equipment 140 Retained earnings 210 Furniture and fixtures 170 Sales revenue 3,600 General expense 320 Vehicles 25