Jumbo reported the following information about its stock on its December 31, 2018, balance sheet:
Preferred stock, $100 par value, 6% cumulative, 30,000 shares authorized 1,000 shares issued and outstanding $100,000
Common stock, $10 par value, 150,000 shares authorized 50,000 shares issued and outstanding 500,000
Jumbo engaged in the following stock transactions during 2019:
Mar. 1 Issued 10,000 shares of for cash.
Apr. 1 Purchased 2,000 shares of as treasury stock.
Aug. 1 Resold 1,000 shares of treasury stock.
Sept. 1 Declared and distributed a 50% stock on common stock.
Required:
1. Does Jumbo have a simple or complex capital structure?
2. Calculate the number of shares that Jumbo would use to calculate basic EPS for its 2019 income statement.
