1. During 2021, john Inc. earned a net income of $1,200,000. They paid a dividend of $51,000 to their preferred stockholders and $100,000 to their common stockholders. They had 50,000 preferred shares outstanding and 25,000 common shares outstanding for the year. Calculate Earnings per Share for 2021. If they had paid no dividends to their common stock, what would be the EPS then?
2. During the year, john inc. sold plant and equipment for $14 million in cash. These assets were originally bought 8 years ago for $81 million and were expected to last 10 years after which they were expected to be sold for 10 million. Show the journal entry for recording this transaction assuming straight line method of depreciation.
3. During 2021, john Inc. reported income of $1,600,000 before income taxes and realized a gain of $470,000 from the disposal of assets of a discontinued division. The income is subject to taxation at 30%. Indicate an appropriate presentation of these items on the Income Statement.