For the year ended December 31, Southern Supply had net sales of $3,875,000, costs and other expenses (including income tax) of $3,100,000, and an extraordinary gain (net of income tax) of $210,000.
a. Prepare a condensed income statement (including earnings per share), assuming that 620,000 shares of common stock were outstanding throughout the year. (A condensed income statement is illustrated in Exhibit 12-2 .)
b. Which earnings per share figure is used in computing the price-earnings ratio for Southern Supply reported in financial publications such as The Wall Street Journal? Explain briefly.