On January 1, 2019, Paul acquired 80% of Saul. Information regarding the income and equity structureof the 2 companies as of the year ended December 31, 2019, is as follows:Paul Corp Saul Corp$72,00012,000Internally generated net incomeCommon shares outstanding during the yearWarrants to acquire Paul stock, outstanding during the year8% convertible (into Saul shares), $100 par preferred shares$114,00025,0004,0001,000outstanding during the year1,200Nonconvertible preferred shares outstanding5001) The warrants to acquire Paul stock were issued in 2018.Each warrant can be exchanged for one share of Paul stockat an exercise price of $14 per share2) Each share of convertible preferred stock can be convertedinto 3 shares of Saul common stock. The preferred stock paysan annual dividend of $9,600. Paul owns 70% of the Convertiblepreferred stock.3) The nonconvertible preferred stock was issued in 2017,and pays a 6 month dividend of $750Compute the basic EPS for the year ended December 31, 2019

Name: On January 1, 2019, Paul acquired 80% of Saul. Information regarding
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Description: On January 1, 2019, Paul acquired 80% of Saul. Information regarding the income and equity structureof the 2 companies as of the year ended December 31, 2019, is as follows:Paul Corp Saul Corp$72,00012,000Internally generated net incomeCommon shares

Subsidiary calculation: Basic EPS = (72000-9600)/12000= $5.2 Consolidated calculation Basic EPS =…

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On January 1, 2019, Paul acquired 80% of Saul. Information regarding the income and equity structure of the 2 companies as of the year ended December 31, 2019, is as follows: Paul Corp Saul Corp Internally generated net income Common shares outstanding during the year $114,000 $72,000 25,000 12,000 Warrants to acquire Paul stock, outstanding during the year 8% convertible (into Saul shares), $100 par preferred shares outstanding during the year Nonconvertible preferred shares outstanding 4,000 1,000 1,200 500 1) The warrants to acquire Paul stock were issued in 2018. Each warrant can be exchanged for one share of Paul stock at an exercise price of $14 per share 2) Each share of convertible preferred stock can be converted into 3 shares of Saul common stock. The preferred stock pays an annual dividend of $9,600. Paul owns 70% of the Convertible preferred stock. 3) The nonconvertible preferred stock was issued in 2017, and pays a 6 month dividend of $750 Compute the basic EPS for the year ended December 31, 2019

On January 1, 2019, Paul acquired 80% of Saul. Information regarding the income and equity structure of the 2 companies as of the year ended December 31, 2019, is as follows: Paul Corp Saul Corp Internally generated net income Common shares outstanding during the year $114,000 $72,000 25,000 12,000 Warrants to acquire Paul stock, outstanding during the year 8% convertible (into Saul shares), $100 par preferred shares outstanding during the year Nonconvertible preferred shares outstanding 4,000 1,000 1,200 500 1) The warrants to acquire Paul stock were issued in 2018. Each warrant can be exchanged for one share of Paul stock at an exercise price of $14 per share 2) Each share of convertible preferred stock can be converted into 3 shares of Saul common stock. The preferred stock pays an annual dividend of $9,600. Paul owns 70% of the Convertible preferred stock. 3) The nonconvertible preferred stock was issued in 2017, and pays a 6 month dividend of $750 Compute the basic EPS for the year ended December 31, 2019

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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