Reporting Earnings per Share Disclosures

Siera Inc. had 350,000 shares of no par common stock outstanding throughout 2020 that declared and paid dividends of $75,000 in 2020. The company also had 45,000 shares of preferred stock that paid dividends of $7,500 in 2020 (declared in 2020). The company reported the following amounts in its income statement for the year ended December 31, 2020 (pretax).

Income from continuing operations	$1,875,000
Loss from discontinued operations	52,500

Required

a. Prepare the earnings per share section of the income statement for the year ended December 31, 2020, assuming a tax rate of 25%.

• Use a negative sign to indicate a loss.
• Round the per share amounts to two decimal places.

Per Share:
Income from continuing operations	Answer
Loss from discontinued component, net of tax savings	Answer
Net income	Answer

Required

b. Repeat requirement of part a except now assume that the company reported income from discontinued operations of $52,500.

• Use a negative sign to indicate a loss.
• Round the per share amounts to two decimal places.

Per Share:
Income from continuing operations	Answer
Income from discontinued component, net of tax	Answer
Net income	Answer