Reference no: EM13793227
On January 1, 2014, Lennon Industries had stock outstanding as follows.
6% Cumulative preferred stock, $100 par value, issued and outstanding 10,000 shares
$1,000,000
Common stock, $10 par value, issued and outstanding 200,000 shares
2,000,000
To acquire the net assets of three smaller companies, Lennon authorized the issuance of an additional 160,000 common shares. The acquisitions took place as shown below.
Date of Acquisition
Shares Issued
Company A April 1, 2014 50,000
Company B July 1, 2014 80,000
Company C October 1, 2014 30,000
On May 14, 2014, Lennon realized a $90,000 (before taxes) insurance gain on the expropriation of investments originally purchased in 2000. On December 31, 2014, Lennon recorded net income of $300,000 before tax and exclusive of the gain.
Instructions:
Assuming a 50% tax rate, compute the earnings per share data that should appear on the financial statements of Lennon Industries as of December 31, 2014. Assume that the expropriation is extraordinary.
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