Following are separate income statements for Austin, Inc., and its 80 percent–owned subsidiary, Rio Grande Corporation as well as a consolidated statement for the business combination as a whole (credit balances indicated by parentheses). Austin Rio Grande ConsolidatedRevenues$(724,000) $(524,000) $(1,248,000)Cost of goods sold 424,000 276,000 700,000 Operating expenses 124,000 94,000 243,000 Equity in earnings of Rio Grande (103,200) Individual company net income$(279,200) $(154,000) Consolidated net income $(305,000)Noncontrolling interest in consolidated net income (25,800)Consolidated net income attributable to Austin $(279,200) Additional InformationAnnual excess fair over book value amortization of $25,000 resulted from the acquisition.The parent applies the equity method to this investment.Austin has 50,000 shares of common stock and 9,000 shares of preferred stock outstanding. Owners of the preferred stock are paid an annual dividend of $50,000, and each share can be exchanged for five shares of common stock.Rio Grande has 35,000 shares of common stock outstanding. The company also has 8,000 stock warrants outstanding. For $10, each warrant can be converted into a share of Rio Grande’s common stock. Austin holds half of these warrants. The price of Rio Grande’s common stock was $20 per share throughout the year.Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes) was $34,000. These bonds can be exchanged for 11,000 shares of the subsidiary’s common stock. Determine Austin’s basic and diluted EPS. (Round your intermediate percentage value to 1 decimal place. Round your final answers to 2 decimal places.) Following are separate income statements for Austin, Inc., and its 80 percent-owned subsidiary, Rio Grande Corporation as well as aconsolidated statement for the business combination as a whole (credit balances indicated by parentheses).Rio Grande$ (524, 000)276,000AustinConsolidated$ (724,000)$ (1,248,000)RevenuesCost of goods soldOperating expensesEquity in earnings of Rio Grande424,000700, 000243,000124,000(103, 200)94,000Individual company net income$ (279, 200)$ (154, 000)Consolidated net income$4(305,000)Noncontrolling interest in consolidated net income(25,800)Consolidated net income attributable to Austin$4(279, 200)Additional Information• Annual excess fair over book value amortization of $25,000 resulted from the acquisition.The parent applies the equity method to this investment.• Austin has 50,000 shares of common stock and 9,000 shares of preferred stock outstanding. Owners of the preferred stock arepaid an annual dividend of $50.000, and each share can be exchanged for five shares of common stock.• Rio Grande has 35,000 shares of common stock outstanding. The company also has 8,000 stock warrants outstanding. For $10,each warrant can be converted into a share of Rio Grande's common stock. Austin holds half of these warrants. The price of RioGrande's common stock was $20 per share throughout the year.• Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes)was $34,000. These bonds can be exchanged for 11,000 shares of the subsidiary's common stock.Determine Austin's basic and diluted EPS. (Round your intermediate percentage value to 1 decimal place. Round your final answersto 2 decimal places.)Earnings PerShareBasicDiluted

Basic EPS—Austin, Inc. Consolidated net income to the parent $279,200 Austin’s preferred…

Following are separate income statements for Austin, Inc., and its 80 percent–owned subsidiary, Rio Grande Corporation as well as a consolidated statement for the business combination as a whole (credit balances indicated by parentheses). Austin Rio Grande Consolidated Revenues $ (724,000 ) $ (524,000 ) $ (1,248,000 ) Cost of goods sold 424,000 276,000 700,000 Operating expenses 124,000 94,000 243,000 Equity in earnings of Rio Grande (103,200 ) Individual company net income $ (279,200 ) $ (154,000 ) Consolidated net income $ (305,000 ) Noncontrolling interest in consolidated net income (25,800 ) Consolidated net income attributable to Austin $ (279,200 ) Additional Information Annual excess fair over book value amortization of $25,000 resulted from the acquisition. The parent applies the equity method to this investment. Austin has 50,000 shares of common stock and 9,000 shares of preferred stock outstanding. Owners of the preferred stock are paid an annual dividend of $50,000, and each share can be exchanged for five shares of common stock. Rio Grande has 35,000 shares of common stock outstanding. The company also has 8,000 stock warrants outstanding. For $10, each warrant can be converted into a share of Rio Grande’s common stock. Austin holds half of these warrants. The price of Rio Grande’s common stock was $20 per share throughout the year. Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes) was $34,000. These bonds can be exchanged for 11,000 shares of the subsidiary’s common stock. Determine Austin’s basic and diluted EPS. (Round your intermediate percentage value to 1 decimal place. Round your final answers to 2 decimal places.)

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Following are separate income statements for Austin, Inc., and its 80 percent–owned subsidiary, Rio Grande Corporation as well as a consolidated statement for the business combination as a whole (credit balances indicated by parentheses).

	Austin		Rio Grande	Consolidated
Revenues	$	(724,000	)	$	(524,000	)	$	(1,248,000	)
Cost of goods sold		424,000			276,000			700,000
Operating expenses		124,000			94,000			243,000
Equity in earnings of Rio Grande		(103,200	)
Individual company net income	$	(279,200	)	$	(154,000	)
Consolidated net income							$	(305,000	)
Noncontrolling interest in consolidated net income								(25,800	)
Consolidated net income attributable to Austin							$	(279,200	)

Additional Information

Annual excess fair over book value amortization of $25,000 resulted from the acquisition.
The parent applies the equity method to this investment.
Austin has 50,000 shares of common stock and 9,000 shares of preferred stock outstanding. Owners of the preferred stock are paid an annual dividend of $50,000, and each share can be exchanged for five shares of common stock.
Rio Grande has 35,000 shares of common stock outstanding. The company also has 8,000 stock warrants outstanding. For $10, each warrant can be converted into a share of Rio Grande’s common stock. Austin holds half of these warrants. The price of Rio Grande’s common stock was $20 per share throughout the year.
Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes) was $34,000. These bonds can be exchanged for 11,000 shares of the subsidiary’s common stock.

Determine Austin’s basic and diluted EPS. (Round your intermediate percentage value to 1 decimal place. Round your final answers to 2 decimal places.)

Following are separate income statements for Austin, Inc., and its 80 percent-owned subsidiary, Rio Grande Corporation as well as a
consolidated statement for the business combination as a whole (credit balances indicated by parentheses).
Rio Grande
$ (524, 000)
276,000
Austin
Consolidated
$ (724,000)
$ (1,248,000)
Revenues
Cost of goods sold
Operating expenses
Equity in earnings of Rio Grande
424,000
700, 000
243,000
124,000
(103, 200)
94,000
Individual company net income
$ (279, 200)
$ (154, 000)
Consolidated net income
$4
(305,000)
Noncontrolling interest in consolidated net income
(25,800)
Consolidated net income attributable to Austin
$4
(279, 200)
Additional Information
• Annual excess fair over book value amortization of $25,000 resulted from the acquisition.
The parent applies the equity method to this investment.
• Austin has 50,000 shares of common stock and 9,000 shares of preferred stock outstanding. Owners of the preferred stock are
paid an annual dividend of $50.000, and each share can be exchanged for five shares of common stock.
• Rio Grande has 35,000 shares of common stock outstanding. The company also has 8,000 stock warrants outstanding. For $10,
each warrant can be converted into a share of Rio Grande's common stock. Austin holds half of these warrants. The price of Rio
Grande's common stock was $20 per share throughout the year.
• Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes)
was $34,000. These bonds can be exchanged for 11,000 shares of the subsidiary's common stock.
Determine Austin's basic and diluted EPS. (Round your intermediate percentage value to 1 decimal place. Round your final answers
to 2 decimal places.)
Earnings Per
Share
Basic
Diluted

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