Peanut Sunny Corporation Corporation Internally generated net income Common shares outstanding during the year Warrants to acquire Peanut stock, outstanding during the year 5% convertible (into Sunny's shares), $100 par preferred shares, outstanding during the year .. Nonconvertible preferred shares outstanding $55,000 20,000 2,000 $56,000 12,000 1,000 800 1,000
On January 1, 2016, Peanut Corporation acquires an 80% interest in Sunny Corporation. Information regarding the income and equity structure of the two companies as of the year ended December 31, 2018, is as attached:
Additional information is as follows:
a. The warrants to acquire Peanut stock are issued in 2017. Each warrant can be exchanged for
one share of Peanut common stock at an exercise price of $12 per share.
b. Each share of convertible
stock. The preferred stock pays an annual dividend totaling $4,000. Peanut owns 60%
of the convertible preferred stock.
c. The nonconvertible preferred stock is issued on July 1, 2018, and pays a 6-month dividend totaling $500.
d. Relevant market prices per share of Peanut common stock during 2018 are as follows:
Average
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Compute the basic and diluted consolidated EPS for the year ended December 31, 2018. Use quarterly share averaging.
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