Question

Comparative Statements of Shareholders’ Equity for Locke Intertechnology Corporation were reported as follows for the fiscal years ending December 31, 2016, 2017, and 2018.

LOCKE INTERTECHNOLOGY CORPORATION Statements of Shareholders' Equity For the Years Ended Dec. 31, 2016, 2017, and 2018 (s in millions) Preferred Stock, $10 par Additional Total Common Stock, $1 par $ 40 Paid-in Capital 550 520 85 Retained Earnings $1,900 Shareholders Equity $ 2,490 529 93 Balance at January 1, 2016 Sale of preferred shares Sale of common shares, 7/1 Cash dividend, preferred Cash dividend, common Net income (13) (13) 350 3,445 350 (25) (17) Balance at December 31, 2016 48 1,155 2,233 Retirement of common shares, 4/1 Cash dividend, preferred Cash dividend, common 3-for-2 split effected in the form of a (69) (40) (17) common stock dividend, 8/12 Net income 22.0 (22.0) 450 3,805 450 1,093.0 90 3 1 2,637 (96.60) Balance at December 31, 2017 66.0 6.60 10% common stock dividend, 5/1 Sale of common shares, 9/1 Cash dividend, preferred Cash dividend, common Net income 34 (33) 434 (33) 434 $75.60 $1,214.0 $2,937.40 Balance at December 31, 2018 $ 4,236 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, 2016, 2017, and 2018. No potential common shares were outstanding during any of the periods shown. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).) Year 2016 2017 2018 Numerator DenominatorEarnings per share

Answer 1

Locke Intertechnology Corporation 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, 2016, 2017, and 2018. No potential common shares were outstanding during any of the periods shown. (Do not round intermediate calculations and round your final answers to 2 decimal places.) 2016 EPS -Net Income/outstanding No. of shares EPS 350/40 8.75 2017 EPS - Net income/Outstanding No. of shares EPS 450/(9/10+48/1)-9.202 2018 EPS -Net Income/outstanding No. of shares EPS 434/(9/10+66/1)-6.49