Common Stock - $1 par value; 200,000 shares authorized, 150,000 shares issued, 140,000 shares outstanding
Convertible $2 preferred stock - $10 par value; 25,000 shares authorized, issued, and outstanding

Additional paid-in capital – Common Stock Additional paid-in capital – Preferred Stock Retained Earnings
Treasury stock, at cost of 10,000 common shares

Total Shareholders’ Equity Section

Summary Income Statement

Income from Continuing Operations, after tax Discontinued operations, net of tax effect
Net Income

$150,000 250,000

600,000

375,000 1,245,000 (70,000) $2,550,000

$854,000 (34,000) $820,000

In addition, BlueHouse has $1,000,000, 5% convertible bonds reported as long-term liability. The 5% bonds are convertible into 25,000 shares of common stock. In 2020, BlueHouse paid the required dividends on its preferred stock. The preferred shares are convertible into 75,000 shares of common stock. No other stock issues or repurchase of stock for treasury occurred during the year.

1. Summarize the basic and diluted earnings per share that they must report on the income statement for 2020.

2. Prepare the note disclosures required including the earnings per share reconciliation.

Answer rating: 100% (QA)

1 The company must report basic and diluted earnings per share of 57... View the full answer