For the Year Ended December 31, 2021, Harvest Productions Inc

question 7

Essay

For the year ended December 31, 2021, Harvest Productions Inc. earned $4,000,000. Outstanding preferred shares included $400,000 in 3% cumulative preferred shares issued on January 1, 2020 and $500,000 in 2% non-cumulative preferred shares issued on January 1, 2021. Dividends on the cumulative preferred shares were not declared in 2020. On December 15, 2021, Harvest declared $10,000 in dividends on the non-cumulative preferred shares, payable on January 15, 2022. Dividends on the cumulative preferred shares are neither declared nor paid.
Required:
Determine the net income available to ordinary shareholders for the year ended December 31, 2021.

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Definitions:

Perpetual Inventory System

A method of inventory management where records are updated in real-time with every sale and restocking.

FOB Shipping Point

A term in shipping where the buyer assumes responsibility for the goods and shipping cost as soon as the goods leave the seller’s premises.

Freight Charges

Costs incurred for transporting goods from one place to another by sea, air, or land.

Trade Discount

A reduction in the listed price of goods or services offered by sellers to buyers in a commercial transaction.