Exercise 10-16 (Algo) Effect of Convertible Preferred Stock on Earnings per Share LO 10-4 Pagle Corporation holds 80 percent of Standard Company's common shares. The companies report the following balance sheet data for December 31, 20X1: Assets Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Standard Company Stock Total Assets Liabilities and Owners' Equity Accounts Payable Taxes Payable Preferred Stock ($10 par value) Common Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Owners' Equity Pagle Corporation $ 51,000 82,000 122,000 740,000 (285,000) 152,000 $ 862,000 Basic earnings per share Diluted earnings per share $ 206,000 76,000 200,000 100,000 Standard Company Required: Compute basic and diluted EPS for the consolidated entity for 20X1. Note: Round your answers to 2 decimal places. $ 41,000 62,000 72,000 340,000 (145,000) $ 370,000 $ 80,000 100,000 50,000 140,000 280,000 $ 862,000 $ 370,000 An 8 percent annual dividend is paid on the Pagle preferred stock and a 12 percent dividend is paid on the Standard preferred stock. Pagle's preferred shares are not convertible. Standard's preferred shares can be converted into 15,000 shares of common stock at any time. For 20X1, Standard reports $54,000 of net income and pays total dividends of $24,000, and Pagle reports $61,000 of income from its separate operations and pays total dividends of $38,000.
Exercise 10-16 (Algo) Effect of Convertible Preferred Stock on Earnings per Share LO 10-4 Pagle Corporation holds 80 percent of Standard Company's common shares. The companies report the following balance sheet data for December 31, 20X1: Assets Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Standard Company Stock Total Assets Liabilities and Owners' Equity Accounts Payable Taxes Payable Preferred Stock ($10 par value) Common Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Owners' Equity Pagle Corporation $ 51,000 82,000 122,000 740,000 (285,000) 152,000 $ 862,000 Basic earnings per share Diluted earnings per share $ 206,000 76,000 200,000 100,000 Standard Company Required: Compute basic and diluted EPS for the consolidated entity for 20X1. Note: Round your answers to 2 decimal places. $ 41,000 62,000 72,000 340,000 (145,000) $ 370,000 $ 80,000 100,000 50,000 140,000 280,000 $ 862,000 $ 370,000 An 8 percent annual dividend is paid on the Pagle preferred stock and a 12 percent dividend is paid on the Standard preferred stock. Pagle's preferred shares are not convertible. Standard's preferred shares can be converted into 15,000 shares of common stock at any time. For 20X1, Standard reports $54,000 of net income and pays total dividends of $24,000, and Pagle reports $61,000 of income from its separate operations and pays total dividends of $38,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 10-16 (Algo) Effect of Convertible Preferred Stock on Earnings per Share LO 10-4
Pagle Corporation holds 80 percent of Standard Company's common shares. The companies report the following balance sheet data
for December 31, 20X1:
Assets
Cash
Accounts Receivable.
Inventory
Buildings and Equipment
Less: Accumulated Depreciation
Investment in Standard Company Stock
Total Assets
Liabilities and Owners' Equity
Accounts Payable
Taxes Payable
Preferred Stock ($10 par value)
Common Stock:
$10 par value
$5 par value
Retained Earnings
Total Liabilities and Owners' Equity
Pagle
Corporation
$ 51,000
82,000
122,000
740,000
(285,000)
152,000
$ 862,000
Basic earnings per share
Diluted earnings per share
$206,000
76,000
200,000
100,000
280,000
$ 862,000
Required:
Compute basic and diluted EPS for the consolidated entity for 20X1.
Note: Round your answers to 2 decimal places.
Standard
Company
$ 41,000
62,000
72,000
340,000
(145,000)
$ 370,000
$ 80,000
100,000
An 8 percent annual dividend is paid on the Pagle preferred stock and a 12 percent dividend is paid on the Standard preferred stock.
Pagle's preferred shares are not convertible. Standard's preferred shares can be converted into 15,000 shares of common stock at any
time. For 20X1, Standard reports $54,000 of net income and pays total dividends of $24,000, and Pagle reports $61,000 of income
from its separate operations and pays total dividends of $38,000.
50,000
140,000
$ 370,000
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