On January 1, 2020, Logan Limited had shares outstanding as follows: 

6% cumulative preferred shares, $100 par value, 10,000 shares issued and outstanding....................$1,000,000 

Common shares, 200,000 shares issued and outstanding......2,000,000 

To acquire the net assets of three smaller companies, the company authorized the issuance of an additional 330,000 common shares. The acquisitions were as follows: 

Date of Acquisition.......................Shares Issued 

Company A: April 1, 2020...............190,000 

Company B: July 1, 2020.................100,000 

Company C: October 1, 2020..........40,000 

On May 14, 2020, Logan realized a $97,000 gain (before tax) on a discontinued operation from a business segment that had originally been purchased in 2000. On December 31, 2020, the company recorded income of $680,000 before tax, not including the discontinued operation gain. Logan has a 30% tax rate. 

Instructions 

a. Calculate earnings per share for 2020 as it should be reported to shareholders. Round to the nearest cent. 

b. Assume that Logan declared a 1-for-2 reverse stock split on February 10, 2021, and that the company's financial statements for the year ended December 31, 2020, were issued on February 28, 2021. Calculate earnings per share for 2020 as it should be reported to shareholders. Round to the nearest cent. 

c. What determines that Logan has a simple capital structure?