Question: loretta corporation a publicly traded company is preparing the comparative...
Loretta corporation a publicly traded company is preparing the comparative financial statements to be included in the annual report to shareholders. Lorettas fiscal year ends may 31. Following information:
- Income from operations before income tax for Loretta was 800,000 and 1.2 million respectively for the fiscal year ended may 31 2018 and 2017
- Loretta experienced a loss from discontinued operations of 100,000 from a business segment disposed of on march 3 2018
- A 20% combined income tax rate applied to all Lorettas corporation profit, gains and losses
- Lorettas capital structure consists of preferred shares and common shares. The company has not yet issue any convertible securities or warrants and theres no outstanding stock options
- Lorettas issued 200,000 of 10$ per value 5% cumulative proffered shares in 2010. All of these shares are outstanding and no preferred dividends are arrears.
- There were 1 million common shares outstanding Junes 1 2016. ON September 1 2016, Loretta sold an additional 500,000 common shares a 20$ per share. Loretta distributed a 20% dividends on the common shares outstanding on December 1 2017
A) determine the weighted average number of common shares that would be used in calculating earnings per share on the current comparative income statement for:
The year ended may 31 2018 and may 31 2017