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    Earnings per share on common stocks

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    Ace Company had 200,000 shares of common stock outstanding on December 31, 2008. During the year 2009 the company issued 8,000 shares on May 1 and retired 14,000 shares on October 31. For the year 2009 Ace Company reported net income of $249,690 after a casualty loss of $40,600 (net of tax).

    What earnings per share data should be reported at the bottom of its income statement, assuming that
    the casualty loss is extraordinary?

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    Solution Preview

    At the bottom of the income statement the EPS relating income from continuing operations, extraordinary loss and net income would be reported
    Income from continuing operations = 249,690+40,600 = $290,290
    Extraordinary loss ...

    Solution Summary

    The solution explains the earnings per share that should be shown in the income statement below net income.