exercise 4-10 (algo) earnings per share lo4-5\nthe esposito import company had 1 million shares of common…
exercise 4-10 (algo) earnings per share lo4-5\nthe esposito import company had 1 million shares of common stock outstanding during 2027. its income statement report following items: income from continuing operations, $5 million; loss from discontinued operations, $1.2 million. all of these are net of tax.\nrequired:\nprepare the 2027 eps presentation for the esposito import company.\nnote: amounts to be deducted should be indicated with a minus sign. round your answers to 2 decimal places.\nearnings per share:\nincome from continuing operations\nloss from discontinued operations\nnet income
Answer
Explanation:
Step1: Calculate EPS for continuing operations
EPS for continuing operations = $\frac{\text{Income from continuing operations}}{\text{Number of shares outstanding}}$ = $\frac{5000000}{1000000}=5.00$
Step2: Calculate EPS for discontinued operations
EPS for discontinued operations = $\frac{\text{Loss from discontinued operations}}{\text{Number of shares outstanding}}$ = $\frac{- 1200000}{1000000}=-1.20$
Step3: Calculate net - income EPS
Net income = Income from continuing operations+Loss from discontinued operations = $5000000 - 1200000 = 3800000$ EPS for net income = $\frac{\text{Net income}}{\text{Number of shares outstanding}}$ = $\frac{3800000}{1000000}=3.80$
Answer:
| Earnings per share | Amount |
|---|---|
| Income from continuing operations | $5.00$ |
| Loss from discontinued operations | $-1.20$ |
| Net income | $3.80$ |