Kingbird Corporation is preparing the comparative financial statements for the annual report to its shareholders for fiscal years ended
May 31, 2020, and May 31, 2021. The income from operations for the fiscal year ended May 31, 2020, was $1,793,000 and income
from operations for the fiscal year ended May 31, 2021, was $2,412,000. In both years, the company incurred a 10% interest expense
on $2,393,000 of debt, an obligation that requires interest-only payments for 5 years. The company experienced a loss from
discontinued operations of $614,000 on February 2021. The company uses a 20% effective tax rate for income taxes.
The capital structure of Kingbird Corporation on June 1, 2019, comisted of 971,000 shares of common stock outstanding
and 20,500 shares of $50 par value, 6%, cumulative preferred stock. There were no preferred dividends in arrears, and the company
had not issued any convertible securities, options, or warrants
On October 1, 2019, Kingbird sold an additional 510,000 shares of the common stock at $20 per share. Kingbird distributed a 20%
stock dividend on the common shares outstanding on January 1, 2020. On December 1, 2020, Kingbird was able to sell an
additional 764,000 shares of the common stock at $22 per share. These were the only common stock transactions that occurred
during the two fiscal years.
(a)
(b)
(c)
Prepare, in good form, a comparative income statement, beginning with income from operations, for Kingbird Corporation for the
fiscal years ended May 31, 2020, and May 31, 2021. This statement will be included in Kingbird's annual report and should display
the appropriate earnings per share presentations. (Round earnings per share to 2 decimal places, eg. $1.55)
KINGBIRD CORPORATION
Comparative Income Statement
For Fiscal Years Ended May 31, 2020 and 2021
Earnings per share:
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$
2020
2021
