1. (EPS: Simple Capital Structure) A portion of the statement of income and retained earnings of Pierson Inc. for the current year follows. Note 1 during the year, Pierson Inc. suffered a major casualty loss of $1,340,000 after applicable income tax reduction of $1,200,000. At the end of the current year, Pierson Inc. has outstanding 8,000,000 shares of $10 par common stock and 50,000 shares of 6% preferred. On April 1 of the current year, Pierson Inc. issued 1,000,000 shares of common stock for $32 per share to help finance the casualty. Compute the earnings per share on common stock for the current year as it should be reported to stockholders.
