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    Earnings per share (net loss, continuing ops, stock dividends)

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    On December 31, 2015, Ainsworth, Inc., had 600 million shares of common stock outstanding. Twenty million shares of 8%, $100 par value cumulative, nonconvertible preferred stock were sold on January 2, 2016. On April 30, 2016, Ainsworth purchased 30 million shares of its common stock as treasury stock. Twelve million treasury shares were sold on August 31. Ainsworth issued a 5% common stock dividend on June 12, 2016. No cash dividends were declared in 2016. For the year ended December 31, 2016, Ainsworth reported a net loss of $140 million, including an after-tax loss from discontinued operations of $400 million.

    1. Determine Ainsworth's net loss per share for the year ended December 31, 2016.
    2. Determine the per share amount of income or loss from continuing operations for the year ended December 31, 2016.
    3. Prepare an EPS presentation that would be appropriate to appear on Ainsworth's 2016 and 2015 comparative income statements. Assume EPS was reported in 2015 as $.75, based on net income (no discontinued operations) of $450 million and a weighted-average number of common shares of 600 million.

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    Solution Summary

    Using the Ainsworth example, the earnings per share are calculated (income/loss).