Reporting EPS: Discontinued OperationsTaft Corporation had after-tax income from continuing operations of $11.4 million for 2020. Taft also reported a $2.09 million after-tax loss on the disposal of its textile subsidiary. Taft uses a calendar-year reporting period. Taft's capital structure consists of the following. Preferred stock: 170,000 shares of $100 par, 8% cumulative nonconvertible preferred stock issued in 2020. No dividends were declared in the current year.Common stock: Outstanding January 1, 2020, 4,271,865 shares, $1 par. Dividends of $1.00 per share were declared and paid in 2020. On July 1, 2020, a three-for-one stock split was declared and the shares were issued. Requireda. What type of capital structure does Taft have (simple or complex)?Simple structureb. Compute relevant EPS amounts.Note: Round earnings per share amounts to two decimal places.Income from ContinuingOperations Available to Weighted Avg. CommonShares Outstanding0 x sPerCommon StockholdersShareBasic EPSNet Income Available to Weighted Avg. CommonShares Outstanding0 x SPerCommon StockholdersShareBasic EPS0 xc. Show the EPS presentation for financial reporting.Basic EPSIncome from continuing operations11,400,000 xLoss from discontinued operations, net of tax2,090,000 xNet income

The following calculations are done in the records of Taft Corporation to show the change in EPS due…

Answered: Reporting EPS: Discontinued Operations…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 1Q: Define each of the following terms: Weighted average cost of capital, WACC; after-tax cost of debt,...

See similar textbooks

Related questions

Concept explainers

Question

Reporting EPS: Discontinued Operations

Taft Corporation had after-tax income from continuing operations of $11.4 million for 2020. Taft also reported a $2.09 million after-tax loss on the disposal of its textile subsidiary. Taft uses a calendar-year reporting period. Taft's capital structure consists of the following.

Preferred stock: 170,000 shares of $100 par, 8% cumulative nonconvertible preferred stock issued in 2020. No dividends were declared in the current year.
Common stock: Outstanding January 1, 2020, 4,271,865 shares, $1 par. Dividends of $1.00 per share were declared and paid in 2020. On July 1, 2020, a three-for-one stock split was declared and the shares were issued.

Required
a. What type of capital structure does Taft have (simple or complex)?
Simple structure
b. Compute relevant EPS amounts.
Note: Round earnings per share amounts to two decimal places.
Income from Continuing
Operations Available to Weighted Avg. Common
Shares Outstanding
0 x s
Per
Common Stockholders
Share
Basic EPS
Net Income Available to Weighted Avg. Common
Shares Outstanding
0 x S
Per
Common Stockholders
Share
Basic EPS
0 x
c. Show the EPS presentation for financial reporting.
Basic EPS
Income from continuing operations
11,400,000 x
Loss from discontinued operations, net of tax
2,090,000 x
Net income

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.