Pina Corporation is preparing the comparative financial statements for the annual report to its shareholders for fiscal years ended May 31, 2020, and May 31, 2021. The income from operations for the fiscal year ended May 31, 2020, was $1,818,000 and income from continuing operations for the fiscal year ended May 31, 2021, was $2,424,000. In both years, the company incurred a 10% interest expense on $2,424,000 of debt, an obligation that requires interest-only payments for 5 years. The company experienced a loss from discontinued operations of $575,000 on February 2021. The company uses a 20% effective tax rate for income taxes. The capital structure of Pina Corporation on June 1, 2019, consisted of 1,037,000 shares of common stock outstanding and 19,100 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, 2019, Pina sold an additional 511,000 shares of the common stock at $20 per share. Pina distributed a 20% stock dividend on the common shares outstanding on January 1, 2020. On December 1, 2020, Pina was able to sell an additional 785,000 shares of the common stock at $22 per share. These were the only common stock transactions that occurred during the two fiscal years.

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Identify whether the capital structure at Pina Corporation is a simple or complex capital structure. Simple Capital StructureComplex Capital Structure

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Determine the weighted-average number of shares that Pina Corporation would use in calculating earnings per share for the fiscal year ended:

				Weighted-average number of shares
(1)		May 31, 2020
(2)		May 31, 2021

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Prepare, in good form, a comparative income statement, beginning with income from operations, for Pina Corporation for the fiscal years ended May 31, 2020, and May 31, 2021. This statement will be included in Pinas annual report and should display the appropriate earnings per share presentations. (Round earnings per share to 2 decimal places, e.g. $1.55.)

PINA CORPORATION Comparative Income Statement For Fiscal Years Ended May 31, 2020 and 2021
	2020	2021
DividendsExpensesExtraordinary LossIncome Before Extraordinary LossIncome Before TaxesInterest ExpenseIncome From Continuing OperationsIncome From OperationsIncome TaxesLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, June 1Retained Earnings, May 31RevenuesTotal ExpensesTotal Revenues	$	$
DividendsExpensesExtraordinary LossIncome Before Extraordinary LossIncome Before TaxesInterest ExpenseIncome From Continuing OperationsIncome From OperationsIncome TaxesLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, June 1Retained Earnings, May 31RevenuesTotal ExpensesTotal Revenues
DividendsExpensesExtraordinary LossIncome Before Extraordinary LossIncome Before TaxesInterest ExpenseIncome From Continuing OperationsIncome From OperationsIncome TaxesLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, June 1Retained Earnings, May 31RevenuesTotal ExpensesTotal Revenues
DividendsExpensesExtraordinary LossIncome Before Extraordinary LossIncome Before TaxesInterest ExpenseIncome From Continuing OperationsIncome From OperationsIncome TaxesLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, June 1Retained Earnings, May 31RevenuesTotal ExpensesTotal Revenues
DividendsExpensesExtraordinary LossIncome Before Extraordinary LossIncome Before TaxesInterest ExpenseIncome From Continuing OperationsIncome From OperationsIncome TaxesLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, June 1Retained Earnings, May 31RevenuesTotal ExpensesTotal Revenues
DividendsExpensesExtraordinary LossIncome Before Extraordinary LossIncome Before TaxesInterest ExpenseIncome From Continuing OperationsIncome From OperationsIncome TaxesLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, June 1Retained Earnings, May 31RevenuesTotal ExpensesTotal Revenues
DividendsExpensesExtraordinary LossIncome Before Extraordinary LossIncome Before TaxesInterest ExpenseIncome From Continuing OperationsIncome From OperationsIncome TaxesLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, June 1Retained Earnings, May 31RevenuesTotal ExpensesTotal Revenues	$	$
Earnings per share:
DividendsExpensesExtraordinary LossIncome Before Extraordinary LossIncome Before TaxesInterest ExpenseIncome From Continuing OperationsIncome From OperationsIncome TaxesLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, June 1Retained Earnings, May 31RevenuesTotal ExpensesTotal Revenues	$	$
DividendsExpensesExtraordinary LossIncome Before Extraordinary LossIncome Before TaxesInterest ExpenseIncome From Continuing OperationsIncome From OperationsIncome TaxesLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, June 1Retained Earnings, May 31RevenuesTotal ExpensesTotal Revenues
DividendsExpensesExtraordinary LossIncome Before Extraordinary LossIncome Before TaxesInterest ExpenseIncome From Continuing OperationsIncome From OperationsIncome TaxesLoss From Discontinued OperationsNet Income / (Loss)Retained Earnings, June 1Retained Earnings, May 31RevenuesTotal ExpensesTotal Revenues	$	$

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