Question

Comparative Statements of Shareholders' Equity for Locke Intertechnology Corporation were reported as follows for the fiscal years ending December 31, 2019, 2020, and 2021. LOCKE INTERTECHNOLOGY CORPORATION Statements of Shareholders' Equity For the Years Ended Dec. 31, 2019, 2020, and 2021 ($ in millions) Preferred Stock $10 par $ 55 Additional Paid in Total Shareholders Equity $ 2,428 (16) 3,271 (20) Balance at January 1, 2019 Sale of preferred shares Sale of common shares, 7/1 Cash dividend, preferred Cash dividend, common Net income Balance at December 31, 2019 Retirement of common shares, 4/1 Cash dividend, preferred Cash dividend, common -3-for-2 split effected in the form of a common stock dividend, 8/12 Net sncome Balance at December 31, 2020 1ex common stock dividend, 5/1 Sale of common shares, 9/1 Cash dividend, preferred Cash dividend, common Net income Balance at December 31, 2021 Required: Infer from the statements the events and transactions that affected Locke Intertechnology Corporation's shareholders' equity and compute earnings per share as it would have appeared on the income statements for the years ended December 31, 2019, 2020, and 2021. No potential common shares were outstanding during any of the periods shown. (Enter your answers in millions rounded to 1 decimal place (ie., 5,500,000 should be entered as 5.5).) Year Numerator 1 Denominator - Earnings per share 2019 2020 IN 2021

Answer 1

Solution :

Solution: (Amounts in Millions, except per share - -amount) 2019 - net income Preffered Dividends. ___$ 290. -$1 55 +9(672) Shares at Jan 1 New Shares Earnings Per share $4.86 $289 59.5 2020 Earnings net income Prefbered Dividends Per share $ 380 La $379 - $4.14 64 (1.50) - 4(942) (1.50) 91.5 Shares at Jan 1 Retired Shares L Stock split . adjustment Earnings Per Share 2021 Prelered net income dividends a $412 - $2 90 (1.10) + 3(4/12) New Shares Shares at Jan 1 Stock - -Divident Adjustment a $4.10. $410 100