Computing consolidated earnings per share (EPS) Assume the following facts about a parent and its 75% owned subsidiary company: Parent Subsidiary Net income $180,000 Common shares outstanding 50,000 Convertible preferred stock Dividends $17,100 Convertible into 9,000 shares of common stock Convertible bonds a. Compute basic earnings per share $ 3.93 b. Compute diluted earnings per share $ 3.68 x $45,000 22,000 (16,500 75% owned by parent) Interest expense after tax $7,200 Convertible into 4,500 shares of common stock
Computing consolidated earnings per share (EPS) Assume the following facts about a parent and its 75% owned subsidiary company: Parent Subsidiary Net income $180,000 Common shares outstanding 50,000 Convertible preferred stock Dividends $17,100 Convertible into 9,000 shares of common stock Convertible bonds a. Compute basic earnings per share $ 3.93 b. Compute diluted earnings per share $ 3.68 x $45,000 22,000 (16,500 75% owned by parent) Interest expense after tax $7,200 Convertible into 4,500 shares of common stock
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter14: Intercorporate Investments In Common Stock
Section: Chapter Questions
Problem 30P
Question
![Computing consolidated earnings per share (EPS)
Assume the following facts about a parent and its 75% owned subsidiary company:
Parent
Subsidiary
Net income
$180,000
Common shares outstanding 50,000
Convertible preferred stock
Dividends $17,100
Convertible into 9,000 shares of common stock
Convertible bonds
a. Compute basic earnings per share
$ 3.93
b. Compute diluted earnings per share
$ 3.68
x
$45,000
22,000 (16,500 75% owned by parent)
Interest expense after tax $7,200
Convertible into 4,500 shares of common stock](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F94c482eb-8fff-48eb-acb0-f59f6b8a39b3%2Fa6e7afe3-3450-4a46-8c52-309ec537245b%2Fks2j88a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Computing consolidated earnings per share (EPS)
Assume the following facts about a parent and its 75% owned subsidiary company:
Parent
Subsidiary
Net income
$180,000
Common shares outstanding 50,000
Convertible preferred stock
Dividends $17,100
Convertible into 9,000 shares of common stock
Convertible bonds
a. Compute basic earnings per share
$ 3.93
b. Compute diluted earnings per share
$ 3.68
x
$45,000
22,000 (16,500 75% owned by parent)
Interest expense after tax $7,200
Convertible into 4,500 shares of common stock
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