The shareholders’ equity section of Fogo Ltd.’s balance sheet is shown below:

During fiscal 2015 the following occurred:

1. On January 31, 500,000 common shares were issued for \($2\) per share.

ii. On July 31, 1,000,000 common shares were issued for \($2.25\) per share.

iii. On October 31, dividends on preferred shares of \($2\) per share were declared and paid.

iv. On October 31, dividends on common shares of \($.02\) per share were declared and paid.
v. Net income for fiscal 2015 was \($400,000.\) 

Required:

a. Calculate the weighted-average number of common shares outstanding during fiscal 2015. (Learn how to calculate the weighted-average number of shares outstanding in the Online Learning Centre for this textbook at www.mcgrawhillconnect.ca.)

b. Calculate basic earnings per share for the year ended November 30, 2015.

c. Calculate return on shareholders’ equity for the year ended November 30, 2015.

d. Prepare the shareholders’ equity section for Fogo’s November 30, 2015 balance sheet.

Transcribed Image Text:

Fogo Ltd. Extracts from the November 30, 2014 balance sheet Shareholders' equity Preferred shares (authorized 100,000; outstanding 75,000) Common shares (authorized 10,000,000; outstanding 6,000,000) Retained earnings Total shareholders' equity $1,500,000 3,000,000 615,000 $5,115,000