Lyon Company shows the following condensed income statement information for the
year ended December 31, 2019:
Income before discontinued operations ………………………………………….$ 29,936
Less: Loss from discontinued operations loss (net of income tax) ……..(2,176)
Net income …………………………………………………………………………………….$27,760
Lyon declared dividends of $6,000 on preferred stock and $17,280 on common stock. At the beginning of 2019, 10,000 shares of were outstanding. On May 1, 2019, the company issued 2,000 additional common shares, and on October 31, 2019, it issued a 20% stock on its common stock. The preferred stock is not convertible.
Required:
1. Compute the 2019 basic earnings per share.
2. Show the 2019 income statement disclosure of basic earnings per share.
3. Draft a related note to accompany the 2019 financial statements.
