Step 1: Read the question

At December 31, 2020, Riverbed Corporation had the following shares outstanding:

9% cumulative preferred shares, 105,700 shares outstanding

Common shares, 3,850,000 shares outstanding

During 2020, the corporation’s only share transaction was the issuance of 430,000 comm

Income from continuing operations before tax

Discontinued operations (loss before tax)
Preferred dividends declared
Common dividends declared
Effective tax rate
Calculate earnings per share information as it should appear in the financial statements o
Step 2: Collect the data
Income from continuing operations before tax
Discontinued operations (loss before tax)
Preferred dividends declared
Common dividends declared
Effective tax rate
9% cumulative preferred shares, 105,700 shares outstanding
Number of Cumulative prefered shares
Prefered dividend
Common shares, 3,850,000 shares outstanding
Number of Common shares at the end of the year
Number of Common shares issued in April 1
Step 3- Solve the question , follow the links in the excel file. All the formulas are lin
Income from continuing operations before tax
    Income tax (36%)
Income from continuing operations
Discontinued operations
    Loss before tax
    Less: income tax recovery
Net income

Preferred dividend entitlement ($10,570,000 × 9%)

Weighted average common shares outstanding:

Dec 31,2019-Dec 31, 2020
April1, 2020-Dec 31, 2020

Earnings per share:

Income from continuing operations

Discontinued operations
Net income
 $10,570,000
19,250,000

00 common shares on April 1. During 2020, the fol

$23,220,000
3,154,000
951,300
2,250,000
36%
ements of Riverbed Corporation for the year ended December 31, 2020. (Round per share answ

$23,220,000
$3,154,000
$951,300
$2,250,000
36%
$10,570,000
105,700
9%
$19,250,000
3,850,000
430,000
s are linked to the data in the Blue cells
$23,220,000
$8,359,200
$14,860,800

-$3,154,000
$1,135,440 -$2,018,560
 $12,842,240

$951,300

Period
(Number of
# of share month)
=3,850,000-430,000 3,420,000 12
New issued shared in April 430,000 9
Weighted average 3,850,000

Prefered
Hint Income/Loss
Dividend

= ($14,860,800 – $951,300) ÷ 3, $14,860,800 $951,300

= $2,018,560 ÷ 3,742,500 -$2,018,560
= ($12,842,240 – $951,300) ÷ 3, $12,842,240 $951,300
 Weighted average

3,420,000
322,500
3,742,500

Income avaible to
EPS
Common share holders

$13,909,500 3.72
-$2,018,560 -0.54
$11,890,940 3.18