Computing consolidated earnings per share (EPS) Assume the following facts about a parent and its 75% owned subsidiary company: Parent Net income $210,000 Common shares outstanding 50,000 Convertible preferred stock Dividends $20,100 Convertible into 9,000 shares of common stock Convertible bonds a. Compute basic earnings per share $ b. Compute diluted earnings per share Subsidiary $49,000 28,000 (21,000= 75% owned by parent) Interest expense after tax = $7,100Convertible Into 6,000 shares of common stock
Computing consolidated earnings per share (EPS) Assume the following facts about a parent and its 75% owned subsidiary company: Parent Net income $210,000 Common shares outstanding 50,000 Convertible preferred stock Dividends $20,100 Convertible into 9,000 shares of common stock Convertible bonds a. Compute basic earnings per share $ b. Compute diluted earnings per share Subsidiary $49,000 28,000 (21,000= 75% owned by parent) Interest expense after tax = $7,100Convertible Into 6,000 shares of common stock
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Computing consolidated earnings per share (EPS)
Assume the following facts about a parent and its 75% owned subsidiary company:
Net income
$210,000
Common shares outstanding 50,000
Convertible preferred stock Dividends $20,100 Convertible into 9,000 shares of common stock
Convertible bonds
a. Compute basic earnings per share
$
Parent
b. Compute diluted earnings per share
Subsidiary
$49,000
28,000 (21,000 = 75% owned by parent)
Interest expense after tax = $7,100Convertible Into 6,000 shares of common stock](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb88d8880-5697-4108-8546-d360487ae3d7%2Ff30ccc29-afdb-44b5-9bf0-7ab0b07983f9%2Feuabgsk_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:
Net income
$210,000
Common shares outstanding 50,000
Convertible preferred stock Dividends $20,100 Convertible into 9,000 shares of common stock
Convertible bonds
a. Compute basic earnings per share
$
Parent
b. Compute diluted earnings per share
Subsidiary
$49,000
28,000 (21,000 = 75% owned by parent)
Interest expense after tax = $7,100Convertible Into 6,000 shares of common stock
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