Question

Exercise 14-12a-b The following information is available for Blossom Corporation for the year ended December 31, 2020: sales revenue $830,000, other revenues and gains $90,500, operating expenses $105,000, cost of goods sold $469,000, other expenses and losses $30,000, and preferred stock dividends $40,175. The company's tax rate was 25%, and it had 68,000 shares outstanding during the entire year.

Answer 1

Blossom Corp.
Income Statement
For the year ending December 31, 2020
Sales revenue		$                                     8,30,000
Cost of goods sold		$                                   -4,69,000
Gross Profit		$                                     3,61,000
Operating expenses		$                                   -1,05,000
Operating Income		$                                     2,56,000
Other revenue and gains		$                                         90,500
Other expenses and losses		$                                       -30,000
Income before tax		$                                     3,16,500
Income tax expense ($316500 X 25%)		$                                       -79,125
Net Income / (loss)		$                                     2,37,375
Earnings per share	=	(Net Income - Preferred dividend) / Number of shares outstanding
	=	($237375 - $40175) / 68000
	=	$                                             2.90