1. When Resisto Systems, Inc., was formed, the company was authorized to issue 5,000 shares of $100 par value, 8 percent cumulative preferred stock, and 100,000 shares of $2 stated value common stock. Half of the preferred stock was issued at a price of $104 per share, and 89,000 shares of the common stock were sold for $16 per share. At the end of the current year, Resisto has retained earnings of $382,000.

Prepare the stockholders equity section of the companys balance sheet at the end of the current year.

2. For the year ended December 31, Southern Supply had net sales of $7,540,000, costs and other expenses (including income tax) of $5,940,000, and an extraordinary gain (net of income tax) of $420,000.

A.Prepare a condensed income statement (including earnings per share), assuming that 910,000 shares of common stock were outstanding throughout the year.

B.Which earnings per share figure is used in computing the price-earnings ratio for Southern Supply reported in financial publications such as The Wall Street Journal? EPS on net earnings OR EPS on earnings before extraordinary items

3.The net income of Foster Furniture, Inc., amounted to $1,600,000 for the current year.

Compute the amount of earnings per share assuming that the shares of capital stock outstanding throughout the year consisted of.

A. 400,000 shares of $1 par value common stock and no preferred stock.

B. 100,000 shares of 8 percent, $100 par value preferred stock and 300,000 shares of $5 par value common stock.