Answered step by step
Verified Expert Solution
Question
1 Approved Answer
HELP! Please :( I only have an hour!!! Problem 16-6 Novak Corporation is preparing the comparative financial statements for the annual report to its shareholders
HELP! Please :( I only have an hour!!!
Problem 16-6 Novak Corporation is preparing the comparative financial statements for the annual report to its shareholders for fiscal years ended May 31, 2017, and May 31, 2018. The income from operations for the fiscal year ended May 31, 2017, was $1,753,000 and income from continuing operations for the fiscal year ended May 31, 2018, was $2,478,000. In both years, the company incurred a 10% interest expense on $2,453,000 of debt, an obligation that requires interest-only payments for 5 years. The company experienced a loss from discontinued operations of $619,000 on February 2018. The company uses a 40% effective tax rate for income taxes. The capital structure of Novak Corporation on June 1, 2016, consisted of 1,023,000 shares of common stock outstanding and 20,800 shares of $50 par value, 6%, cumulative preferred stock. There were no preferred dividends in arrears, and the company had not issued any convertible securities, options, or warrants. On October 1, 2016, Novak sold an additional 484,000 shares of the common stock at $20 per share. Novak distributed a 20% stock dividend on the common shares outstanding on January 1, 2017. On December 1, 2017, Novak was able to sell an additional 816,000 shares of the common stock at $22 per share. These were the only common stock transactions that occurred during the two fiscal years Identify whether the capital structure at Novak Corporation is a simple or complex capital structure. Simple Capital Structure LINK TO TEXT Determine the weighted-average number of shares that Novak Corporation would use in calculating earnings per share for the fiscal year ended: Weighted-average number of shares (1) May 31, 2017 (2) May 31, 2018Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started