Problem 16-9 Headland Corporation is preparing the comparativefinancial statements to be included in the annual report tostockholders. Headland employs a fiscal year ending May 31. Incomefrom operations before income taxes for Headland was $1,420,000 and$711,000, respectively, for fiscal years ended May 31, 2018 and2017. Headland experienced a loss from discontinued operations of$415,000 on March 3, 2018. A 40% combined income tax rate pertainsto any and all of Headland Corporation’s profits, gains, andlosses. Headland’s capital structure consists of preferred stockand common stock. The company has not issued any convertiblesecurities or warrants and there are no outstanding stock options.Headland issued 39,700 shares of $100 par value, 6% cumulativepreferred stock in 2014. All of this stock is outstanding, and nopreferred dividends are in arrears. There were 1,056,000 shares of$1 par common stock outstanding on June 1, 2016. On September 1,2016, Headland sold an additional 364,800 shares of the commonstock at $16 per share. Headland distributed a 20% stock dividendon the common shares outstanding on December 1, 2017. These werethe only common stock transactions during the past 2 fiscal years.Determine the weighted-average number of common shares that wouldbe used in computing earnings per share on the current comparativeincome statement for: Weighted-average number of common shares (1)The year ended May 31, 2017. (2) The year ended May 31, 2018.Starting with income from operations before income taxes, prepare acomparative income statement for the years ended May 31, 2018 and2017. The statement will be part of Headland Corporation’s annualreport to stockholders and should include appropriate earnings pershare presentation. (Round earnings per share to 2 decimal places,e.g. $2.55.) HEADLAND CORPORATION Comparative Income Statement Forthe Years Ended May 31, 2018 and 2017 2018 2017 $ $ $ $ Earningsper share $ $ $ $ Question Attempts: 0 of 5 used Save for laterSubmit Answer