Reference no: EM132781291
Shown below is information relating to operations of Kravitz, Inc. for the year ended 2019:
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Coptinuing operations:
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Net sales
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$7,550,000
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Cost and expenses (including income taxes)
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$4,930,000
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Other data:
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Current-year loss generated by segment of the business discontinued in May (net of income taxes)
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$272,300
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Gain on disposal of discontinued segment (net of income taxes)
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$564,800
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Prior-period adjustment (decrease in prior years' income net of tax benefit)
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$287,200
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Extraordinary loss (net of income tax benefit)
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$423,000
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Cash dividends declared
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$680,000
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Problem a. Prepare one condensed income statement for 2019, including earnings per share figures. The company had 100,000 shares of a single class of capital stock outstanding throughout the year.
Problem b. Prepare one statement of retained earnings for the year ended December 31, 2019. As originally reported, retained earnings at December 31, 2018, amounted to $7,425,000.
Problem c. Compute the amount of cash dividend per share of common stock declared by the board of directors for 2019.
Problem d. Assume that 2018 earnings per share is a single figure and amounts to $10.00. Assume also that there are no changes in outstanding common or preferred stock in 2019. Do you consider the $10.00 earnings per share figure in 2019 to be a favorable or unfavorable figure in comparison with 2018 performance? Explain.
Problem e. Which of the EPS figures computed above would be of most interest to potential investors to assess the company's future performance?