Question Details

Sparrow Company






The following data relate to Sparrow Company for the current year.

Income before extraordinary item	$6,000,000 
Less: Preferred stock dividends	   100,000 
Income available to common stockholders	$5,900,000 
Extraordinary item	(900,000)
Net income available to common stockholders 	$5,000,000 
	
Common shares outstanding on January 1	3,000,000 
	
Issuance of common stock on October 1	400,000 

Note: Sparrow Company uses the calendar year.

Required:
a.	Compute the weighted-average share.	
		
b.	Compute the basic EPS for:	
	1.	Income before extraordinary item
	2.	Extraordinary item
	3.	Net income







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