The capital structure of Audiology Associates, Inc., at December 31, 2007 , included 5,000 shares of \(\$ 2\) preferred stock and 100,000 shares of common stock. Common shares outstanding during 2008 were \(100,000\). Income from continuing operations during 2008 was \(\$ 370,000\). The company discontinued a segment of the business at a gain of \(\$ 60,000\) and also had an extraordinary gain of \(\$ 30,000\). Audiology Associates' board of directors has restricted \(\$ 250,000\) of retained earnings for expansion of the company's office facilities.

Requirements 

1. Compute Audiology' Associates' earnings per share for 2008. Start with income from continuing operations. Income and loss amounts are net of income tax.

2. Show two ways of reporting Audiology Associates' retained earnings restriction. Retained Earnings at December 31, 2007, was \(\$ 160,000\), and the company declared cash dividends of S100,000 during 2008.