Exercise 1: Shown below is information relating to operations of Franco Corporation for the year ended 2019: 2,750,000 2,125,000 Continuing operations: Net sales Cost and expenses (including income taxes) Other data: Current-year loss generated by segment of the business discontinued in July (net of income taxes) 207,500 Gain on disposal of discontinued segment (net of income taxes) 137,500 Prior-period adjustment (decrease in prior years' income net of tax benefit) 45,000 Extraordinary loss (net of income tax benefit) 17,500 Cash dividends declared (1.50 per share) 150,000 Instructions: a. Prepare a condensed income statement for 2019, including earnings per share figures. The company had 100,000 shares of a single class of capital stock outstanding throughout the year. (10 points) b. Prepare a statement of retained earnings for the year ended December 31, 2019. As originally reported, retained earnings at December 31, 2018, amounted to 2,468,000. (10 points) C. Compute the amount of cash dividend per share of common stock declared by the board of directors for 2019. Assume no dividends in arrears on the preferred stock. (5 points) d. Assume that 2020 earnings per share is a single figure and amounts to 7.00. Assume also that there are no changes in outstanding common or preferred stock in 2020. Do you consider the 7.00 earnings per share figure in 2020 to be a favorable or unfavorable figure in comparison with 2019 performance? Explain. (5 points)