Computing Earnings per Share The income statement, statement of retained earnings, and balance sheet for Jeanette Company are as follows: Jeanette Company Income Statement For the Year Ended December 31, 20X2 Net sales Less: Cost of goods sold Gross margin Less: Operating expenses Operating income Less: Interest expense Income before taxes Less: Income taxes (40%)* Net income * Includes both state and federal taxes. Jeanette Company Statement of Retained Earnings For the Year Ended December 31, 20X2 Balance, beginning of period Net income Total Preferred dividends Dividends to common stockholders Check My Work 1 more Check My Work uses remaining. Amount Percent $8,281,989 100.0% (5,383,293) 65.0 $2,898,696 35.0 (1,323,368) 16.0 $1,575,328 19.0 (50,000) 0.6 $1,525,328 18.4 (610,131) 7.4 $915,197 11.0 $1,979,155 915,197 $2,894,352 (80,000) (201,887) to 410 ACE