Answer:
The company should report the 03 EPS figures on its 2020 income statement:
EPS continuing operations = $3.64
EPS discontinued operations = $(0.54)
EPS net income = EPS continuing operations + EPS discontinued operations = $3.10
Explanation:
<u>* Calculation in EPS continuing operations:</u>
EPS continuing operations = (Net income from continuing operation - preferred dividend)/No. of common shares outstanding
in which: Net income from continuing operation = Income from continuing operations before taxes * (1- tax rate) = 24,649,800 * (1-35%) = $16,022,370
preferred dividend = $1,092,610
No. of common shares outstanding = 4,099,840
EPS continuing operations = ($16,022,370 - $1,092,610) / 4,099,840= $3.64
<u>* Calculation in EPS discontinued operations:</u>
EPS discontinued operations = Net income from discontinuing operation /No. of common shares outstanding
in which: Net income from continuing operation = Income from discontinuing operations before taxes * (1- tax rate) = (3,399,100) * (1-35%) = $(2,209,415)
No. of common shares outstanding = 4,099,840
EPS discontinued operations = (2,209,415)/ 4,099,840 = $(0.54)
