- Waterway Corporation Is Preparing The Comparative Financial Statements For The Annual Report To Its Shareholders For Fis 1 (52.99 KiB) Viewed 57 times
Waterway Corporation is preparing the comparative financial statements for the annual report to its shareholders for fiscal years ended May 31, 2020, and May 31, 2021. The income from operations for the fiscal year ended May 31, 2020, was $1,818,000 and income from operations for the fiscal year ended May 31, 2021, was $2,424,000. In both years, the
company incurred a 10% interest expense on $2,424,000 of debt, an obligation that requires interest-only payments for 5 years. The
company experienced a loss from discontinued operations of $575,000 on February 2021. The
company uses a 20% effective tax rate for income taxes. The capital structure of Waterway Corporation on June 1, 2019, consisted of 1,037,000 shares of common stock outstanding and 19,100 shares of $50 par value, 6%, cumulative preferred stock. There were no preferred dividends in arrears, and the
company had not issued any convertible securities, options, or warrants. On October 1, 2019, Waterway sold an additional 511,000 shares of the common stock at $20 per share. Waterway distributed a 20% stock dividend on the common shares outstanding on January 1, 2020. On December 1, 2020, Waterway was able to sell an additional 785,000 shares of the common stock at $22 per share. These were the only common stock transactions that occurred during the two fiscal years. (a) Identify whether the capital structure at Waterway Corporation is a simple or complex capital structure. (b) eTextbook and Media Save for Later (1) Determine the weighted-average number of shares that Waterway Corporation would use in calculating earnings per share for the fiscal year ended: (2) May 31, 2020 May 31, 2021 Weighted-average number of shares Attempts: 0 of 5 used eTextbook and Media Submit Answer
Prepare, in good form, a comparative income
statement, beginning with income from operations, for Waterway Corporation for the fiscal years ended May 31, 2020, and May 31, 2021. This
statement will be included in Waterway's annual report and should display the appropriate earnings per share presentations. (Round earnings per share to 2 decimal places, eg. $1.55.) Earnings per share: eTextbook and Media Save for Later WATERWAY CORPORATION Comparative Income
Statement For Fiscal Years Ended May 31, 2020 and 2021 2020 $ $ $ $ $ $ 2021 Attempts: 0 of 5 used Submit Answer