For the year ended December 31, Global Exports had net sales of $7,750,000, costs and other expenses (including income tax) of $6,200,000, and an extraordinary gain (net of income tax) of $420,000.

a. Prepare a condensed income statement (including earnings per share), assuming that 910,000 shares of common stock 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 Global

Exports reported in financial publications such as The Wall Street Journal? Explainbriefly.

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Exhibit 12-2 EARNINGS PER SHARE PRESENTATION PERRY CORPORATION CONDENSED INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2011 Net sales.. Costs and expenses (including tax on $9,115,000 continuing operations) Income from continuing operations Loss from discontinued operations (net of 8,310,000 $ 805,000 income tax benefits) Income before extraordinary items Extraordinary loss (net of income tax benefit) Net income Earnings per share of common stock: (90,000) S 715,000 $ (120,000) $ 595,000 Earnings from continuing operations $3,678 Loss from discontinued operations (0.45) Earnings before extraordinary items Extraordinary loss Net eanings $3.22b (0.60) $2.62 "($805,000-$72,000 preferred dividends) ÷ 200,000 shares ($715,000 $72,000) 200,000 shares "($595,000-$72,000) ÷ 200,000 shares