The Stockholders Equity section of the balance sheet for Lahey Construction Company at the end of 2010 is as follows:9%, $10 par, cumulative preferred stock, 500,000 shares authorized,200,000 shares issued and outstanding $ 2,000,000Additional paid-in capital on preferred 7,500,000Common stock, $1 par, 2,500,000 shares authorized,1,500,000 shares issued and outstanding 1,500,000Additional paid-in capital on common 21,000,000Retained earnings 25,500,000Total stockholders equity $57,500,000The

Chapter 13, Exercises #12

The Stockholders€™ Equity section of the for Lahey Construction Company at the end of 2010 is as follows:
9%, $10 par, cumulative preferred stock, 500,000 shares authorized,
200,000 shares issued and outstanding $ 2,000,000
Additional paid-in capital on preferred 7,500,000
Common stock, $1 par, 2,500,000 shares authorized,
1,500,000 shares issued and outstanding 1,500,000
Additional paid-in capital on common 21,000,000
Retained earnings 25,500,000
Total stockholders€™ equity $57,500,000
The lower portion of the 2010 income statement indicates the following:

The Stockholders€™ Equity section of the balance sheet for Lahey

Assume that the number of shares outstanding did not change during the year.
Required
1. Compute earnings per share before extraordinary items.
2. Compute earnings per share after the extraordinary loss.
3. Which of the two EPS ratios is more useful to management? Explain your answer. Would your answer be different if the ratios were to be used by an outsider (e.g., by a potential stockholder)? Why or whynot?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...