Problem 17-6 Crane Corporation is preparing the comparative financial statements for the annual report to its shareholders for the fiscal years ended May 31, 2017, and May 31, 2018. The income from operations was $1,879,600 and $2,534,500, respectively, for each year. In both years, the company incurred a 10% interest expense on $2,504,900 of debt for an obligation that requires interest-only payments for five years. The company experienced a loss of $545,400 from the discontinued operation of its Scotland facility in February 2018. The company uses a 30% effective tax rate for income tax. The capital structure of Crane Corporation on June 1, 2016, consisted of 966,000 common shares outstanding and 20,970 of $50, par value, 6% cumulative preferred shares. There were no preferred dividends in arrears, and the company had not issued any convertible securities, options, or warrants. On October 1, 2016, Crane sold an additional 464,100 common shares at $18 per share. Bryce distributed a 20% stock dividend on the common shares outstanding on January 1, 2017. On December 1, 2017, Crane was able to sell an additional 817,200 common shares at $24 per share. These were the only common share transactions that occurred during the two fiscal years.

Identify whether the capital structure at Crane Corporation is a simple or complex capital structure. The capital structure at Crane Corporation is a complexsimple capital structure. LINK TO TEXT LINK TO TEXT

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

1.		May 31, 2017		shares
2.		May 31, 2018		shares

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Prepare, in good form, a comparative income statement that begins with income from operations for Crane Corporation for the fiscal years ended May 31, 2017, and May 31, 2018. Assume that Crane Corporation discloses all applicable earnings per share data on the face of the income statement. (Round Earnings Per Share amounts to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

CRANE CORPORATION Comparative Income Statements May 31, 2017 and 2018For Fiscal Years Ended May 31, 2017 and 2018
		2017		2018
Income from OperationsDiscontinued Operations Loss, Net of TaxInterest ExpenseNet Income / (Loss)Income Before TaxIncome from Continuing OperationsIncome Tax		$		$
Discontinued Operations Loss, Net of TaxIncome Before TaxInterest ExpenseIncome from OperationsIncome from Continuing OperationsNet Income / (Loss)Income Tax
Income Before TaxIncome from Continuing OperationsDiscontinued Operations Loss, Net of TaxNet Income / (Loss)Income TaxInterest ExpenseIncome from Operations
Income from OperationsIncome Before TaxIncome from Continuing OperationsIncome TaxDiscontinued Operations Loss, Net of TaxNet Income / (Loss)Interest Expense
Income from OperationsIncome from Continuing OperationsNet Income / (Loss)Income TaxIncome Before TaxDiscontinued Operations Loss, Net of TaxInterest Expense
Income TaxInterest ExpenseIncome Before TaxIncome from OperationsDiscontinued Operations Loss, Net of TaxIncome from Continuing OperationsNet Income / (Loss)
Income from OperationsIncome from Continuing OperationsDiscontinued Operations Loss, Net of TaxNet Income / (Loss)Income TaxIncome Before TaxInterest Expense		$		$
Earnings per share:
Net Income / (Loss)Income from Continuing OperationsIncome from OperationsInterest ExpenseNet IncomeDiscontinued Operations LossIncome Before Tax		$		$
Net Income / (Loss)Income TaxIncome Before TaxIncome from OperationsIncome from Continuing OperationsInterest ExpenseDiscontinued Operations Loss
Interest ExpenseIncome from Continuing OperationsIncome TaxIncome from OperationsNet Income / (Loss)Income Before TaxDiscontinued Operations Loss		$		$