For the year ended December 31, Southern Supply had net sales of $3,875,000, costs and other expenses

Question:

For the year ended December 31, Southern Supply had net sales of $3,875,000, costs and other expenses (including income tax) of $3,100,000, and an extraordinary gain (net of income tax) of $210,000.
a. Prepare a condensed income statement (including earnings per share), assuming that 620,000 shares of were outstanding throughout the year. (A condensed income statement is illustrated in Exhibit 12-2 .)
b. Which earnings per share figure is used in computing the price-earnings ratio for Southern Supply reported in financial publications such as The Wall Street Journal? Explain briefly.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...