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Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
Edition 17ISBN: 978-0078025778Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
Edition 17ISBN: 978-0078025778 Exercise 51
Reporting an Extraordinary Item
For the year ended December 31, Southern Supply had net sales of $3,875,000, costs and other expenses (including income tax) of $3,100,000, and an extraordinary gain (net of income tax) of $210,000.
a. Prepare a condensed income statement (including earnings per share), assuming that 620,000 shares of common stock were outstanding throughout the year. (A condensed income statement is illustrated in Exhibit 12-2.)
b. Which earnings per share figure is used in computing the price-earnings ratio for Southern Supply reported in financial publications such as The Wall Street Journal? Explain briefly.
EXHIBIT 12-2 Earnings Per Share Presentation
For the year ended December 31, Southern Supply had net sales of $3,875,000, costs and other expenses (including income tax) of $3,100,000, and an extraordinary gain (net of income tax) of $210,000.
a. Prepare a condensed income statement (including earnings per share), assuming that 620,000 shares of common stock were outstanding throughout the year. (A condensed income statement is illustrated in Exhibit 12-2.)
b. Which earnings per share figure is used in computing the price-earnings ratio for Southern Supply reported in financial publications such as The Wall Street Journal? Explain briefly.
EXHIBIT 12-2 Earnings Per Share Presentation
Explanation
Verified
Verified
a.
Income statement:
• An income state...
Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
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