Calculating its earnings available to common stockholders

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Reference no: EM13812265

Travels Sailing, Inc. sells sailing trips at the seashore. Travels has asked for help in calculating its earnings available to common stockholders. The firm generated revenues of $35,000 from its products. The operating costs to produce the products were $25,000. The financing activities of the firm resulted in an interest expense of $2,000, the repayment of a $2,000 loan, and the receipt of a new $8,000 loan. The firm paid $500 in preferred dividends. The firm received $1,000 in dividend income from its 10% investment in Cooke Enterprises inc. During the year, the firm sold 10 acres of undeveloped land for $8,000; the land was originally purchased twelve years ago for $5,000. Travels also sold a sailboat for $6,000. The boat, purchased six years ago for $25,000, had a book value of $8,000 at the time of the sale. The ordinary income tax rate is 40%, and the tax rate on capital gains is 20%. Travels has a $1,500 operating loss from previous years to carry forward to this year. Please calculate the earnings available to common stockholders for Travels Sailing, Inc.

Reference no: EM13812265

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