Reference no: EM131788230
Question - On January 1, 2012, Bailey Industries had stock outstanding as follows: 6% cumulative preferred stock, $100 par value issued and outstanding 10,000 shares = $1,000,000. Common stock, $10 par value, issued and outstanding 10,000 shares = $2,000,000
To acquire the net assets of three smaller companies, Bailey authorized the issuance of an additional 170,000 common shares. The acquisitions took place as shown below:
Company A April 1, 2012 = 60,000 shares issued.
Company B July 1, 2012 = 80,000 shares issued.
Company C October 1, 2012 = 30,000 shares issued.
On May 14, 2012, Bailey realized a $90,000(before taxes) insurance gain on the expropriation of investments originally purchased in 2000. on December 31, 2012, Bailey recorded net income of $300,000 before tax and exclusive of the gain.
Instructions: Assuming a 40% tax rate, compute the earnings per share data that should appear on the financial statements of Bailey Industries as of December 31, 2012. Assume that the expropriation is extraordinary.