Presented below is information related to Starr Company.1.Net Income [including a discontinued operationsgain...Presented below...

50.1K

Verified Solution

Question

Accounting

Presented below is information related to Starr Company.
1. Net Income [including a discontinued operationsgain (net of tax) of $84,000] $258,500
2. Capital Structure
a. Cumulative 5% preferred stock, $100 par, 6,100 shares issuedand outstanding $610,000
b. $10 par common stock, 74,000 shares outstanding on January 1.On April 1, 40,000 shares were issued for cash. On October 1,16,000 shares were purchased and retired. $1,000,000
c. On January 2 of the current year, Starr purchased OsloCorporation. One of the terms of the purchase was that if Oslo netincome for the following year is $244,000 or more, 50,000additional shares would be issued to Oslo stockholders next year.Oslo’s net income for the current year was $2,600,000.
3. Other Information
a. Average market price per share of common stock during entireyear $30
b. Income tax rate 30%
Compute weighted average shares outstanding.
Weighted average shares outstanding
Compute earnings per share for the current year.(Round answers to 2 decimal places, e.g.52.75.)
Basic earnings per share $
Diluted earnings per share $

Answer & Explanation Solved by verified expert

4.4 Ratings (923 Votes)

See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: AccountingPresented below is information related to Starr Company.1.Net Income [including a discontinued operationsgain...Presented below is information related to Starr Company.1.Net Income [including a discontinued operationsgain (net of tax) of $84,000]$258,5002.Capital Structurea.Cumulative 5% preferred stock, $100 par, 6,100 shares issuedand outstanding$610,000b.$10 par common stock, 74,000 shares outstanding on January 1.On April 1, 40,000 shares were issued for cash. On October 1,16,000 shares were purchased and retired.$1,000,000c.On January 2 of the current year, Starr purchased OsloCorporation. One of the terms of the purchase was that if Oslo netincome for the following year is $244,000 or more, 50,000additional shares would be issued to Oslo stockholders next year.Oslo’s net income for the current year was $2,600,000.3.Other Informationa.Average market price per share of common stock during entireyear$30b.Income tax rate30%Compute weighted average shares outstanding.Weighted average shares outstandingCompute earnings per share for the current year.(Round answers to 2 decimal places, e.g.52.75.)Basic earnings per share$Diluted earnings per share$

1.	Net Income [including a discontinued operationsgain (net of tax) of $84,000]		$258,500
2.	Capital Structure
	a.	Cumulative 5% preferred stock, $100 par, 6,100 shares issuedand outstanding	$610,000
	b.	$10 par common stock, 74,000 shares outstanding on January 1.On April 1, 40,000 shares were issued for cash. On October 1,16,000 shares were purchased and retired.	$1,000,000
	c.	On January 2 of the current year, Starr purchased OsloCorporation. One of the terms of the purchase was that if Oslo netincome for the following year is $244,000 or more, 50,000additional shares would be issued to Oslo stockholders next year.Oslo’s net income for the current year was $2,600,000.
3.	Other Information
	a.	Average market price per share of common stock during entireyear	$30
	b.	Income tax rate	30%