The income statement for Fignon Co. for the year ended December 31, 2015, reported the following. Income
Question:
The income statement for Fignon Co. for the year ended December 31, 2015, reported the following.
Income from continuing operations before income taxes . . . . . . . . . . . . . . . . . . . . $35,000
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,000
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21,000
Loss from disposal of segment (net of income taxes) . . . . . . . . . . . . . . . . . . . . . . . . (4,200)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,800
Compute basic EPS amounts for 2015 under each of the following assumptions (consider each assumption separately):
(a) The company has only one class of common stock with 20,000 shares outstanding.
(b) The company has shares outstanding as follows: preferred 8% stock, $15 par, cumulative, 5,000 shares; common, $12 par, 20,000 shares. Only the current year's preferred dividends are unpaid.
(c) Same as (b) except that Fignon Co. also has preferred 7% stock, $10 par, noncumulative, 6,000 shares, and only $3,000 in dividends on the noncumulative preferred has been declared.
Common StockCommon stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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