PROBLEM 12.1A Reporting Unusual Events; Using Predictive Subtotals L012-3 Eastern Aviation operated both an airline and several restaurants located near airports. During the year just ended, all restaurant operations were discontinued and the following operating results were reported. Continuing operations (airline): Net sales $27,560,000 Costs and expenses 21.660,000 Other data: Operating income from restaurants (net of income tax) 432.000 Gain on sale of restaurants (net of income tax) 2,478,000 Nonrecurring loss 1.200,000 All of these amounts are before income taxes unless indicated otherwise. The company's income tax rate is 40 percent. The nonrecurring loss resulted from damage to a warehouse that is not related to the discontinued restaurant operations. Eastern Aviation had 1,000,000 shares of capital stock outstanding throughout the year. Instructions a. Prepare a condensed income statement, including proper presentation of the discontinued restaurant operations and the nonrecurring loss. Include all appropriate earnings per share figures. b. Assume that you expect the profitability of Eastern Aviation operations to decline by 5 percent next year, and the profitability of the restaurants to decline by 10 percent. What is your estimate of the company's niet earnings per share next year? PROBLEM 12.6A Recording Stock Dividends and Treasury Stock Transactions LL012-4, L012-8 At the beginning of 2021, Thompson Service, Inc, showed the following amounts in the stockholders' equity section of its balance Page 557 sheet. Stockholders' equity: Capital stock. $1 par value, 500,000 shares authorized, 382,000 issued and outstanding Additional paid-in capital: capital stock Total paid-in capital Retained earnings Total stockholders' equity $ 382,000 4,202,000 $4,584,000 2.704,600 $7,288,600 The transactions relating to stockholders' equity during the year are as follows. Jan. 3 Declared a dividend or $1 per share to stockholders of record on January 31, payable on February 15, Feb. 15 Paid the cash dividend declared on January 3, Apr. 12 The corporation purchased 6,000 shares of its own capital stock at a price of $40 per share, May 9 Reissued 4,000 shares of the treasury stock at a price of $44 per share, June 1 Declared a 5 percent stock dividend to stockholders of record at June 15, to be distributed on June 30. The market price of the sto June 30 Distributed the stock dividend declared on June 1. Aug. 4 Reissued 600 of the 2.000 remaining shares of treasury stock at a price of $37 per share. Dec. 31 The Income Summary account, showing net income for the year of $1.928,000, was closed into the Retained Earnings account Dec. 31 The $382,000 balance in the Dividends account was closed into the Retained Earnings account Instructions a. Prepare in general Journal form the entries to record these transactions. b. Prepare the stockholders' equity section of the balance sheet at December 31, 2021. Use the format illustrated in Exhibit 12-6. Include a supporting schedule showing your computation of retained earnings at that date. c. Compute the maximum cash dividend per share that legally could be declared at December 31, 2021, without impairing the paid-in capital of Thompson Service. (Hint: The availability of retained earnings for dividende is metrict them