Plug Corporation holds 80 percent of Socket Company's common stock. The following balance sheet data are presented for December 31, 20X7 Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Socket Company Total Assets Liabilities and Equities Accounts Payable Bonds Payable Preferred Stock ($100 par value) Common Stock ($10 par value) Retained Earnings Total Liabilities and Equities Plug Corporation $ 109,000 159,000 305,000 94,000 2,240,000 (820,000) 616,000 $2,703,000 Basic earnings per share Diuted earnings per share $ 263,000 780,000 1,000,000 660,000 $2,703,000 $ Socket Company 99,000 229,000 305,000 325,000 900,000 (250,000) $1,608,000 $ 148,000 500,000 190,000 400,000 370,000 $1,608,000 Socket reported net income of $122.000 in 20x7 and paid dividends of $61,000. Its bonds have an annual interest rate of 8 percent and are convertible into 33,000 common shares. Its preferred shares pay an 11 percent annual dividend and convert into 19,000 shares of common stock. In addition, Socket has warrants outstanding for 10,000 shares of common stock at $8 per share. The 20X7 average price of Socket common shares was $40. Plug reported income of $330,000 from its own operations for 20x7 and paid dividends of $215.000. Its 10 percent bonds convert into 30,000 shares of its common stock. The companies file separate tax returns and are subject to income taxes of 40 percent Required: Compute basic and diluted EPS for the consolidated entity for 20x7. (Round your intermediate calculations and final answers to two decimal places.)
Plug Corporation holds 80 percent of Socket Company's common stock. The following balance sheet data are presented for December 31, 20X7 Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Socket Company Total Assets Liabilities and Equities Accounts Payable Bonds Payable Preferred Stock ($100 par value) Common Stock ($10 par value) Retained Earnings Total Liabilities and Equities Plug Corporation $ 109,000 159,000 305,000 94,000 2,240,000 (820,000) 616,000 $2,703,000 Basic earnings per share Diuted earnings per share $ 263,000 780,000 1,000,000 660,000 $2,703,000 $ Socket Company 99,000 229,000 305,000 325,000 900,000 (250,000) $1,608,000 $ 148,000 500,000 190,000 400,000 370,000 $1,608,000 Socket reported net income of $122.000 in 20x7 and paid dividends of $61,000. Its bonds have an annual interest rate of 8 percent and are convertible into 33,000 common shares. Its preferred shares pay an 11 percent annual dividend and convert into 19,000 shares of common stock. In addition, Socket has warrants outstanding for 10,000 shares of common stock at $8 per share. The 20X7 average price of Socket common shares was $40. Plug reported income of $330,000 from its own operations for 20x7 and paid dividends of $215.000. Its 10 percent bonds convert into 30,000 shares of its common stock. The companies file separate tax returns and are subject to income taxes of 40 percent Required: Compute basic and diluted EPS for the consolidated entity for 20x7. (Round your intermediate calculations and final answers to two decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Plug Corporation holds 80 percent of Socket Company's common stock. The following balance sheet data are presented for
December 31, 20X7:
Assets
Cash
Accounts Receivable
Inventory
Land.
Buildings and Equipment
Less: Accumulated Depreciation
Investment in Socket Company
Total Assets.
Liabilities and Equities.
Accounts Payable.
Bonds Payable
Preferred Stock ($100 par value)
Common Stock ($10 par value)
Retained Earnings
Total Liabilities and Equities
Plug
Corporation
$ 109,000
159,000
305,000
94,000
2,240,000
(820,000)
616,000
$2,703,000
Basic carvings per share
Diuted earnings por share
$ 263,000
780,000
1,000,000
660,000
$2,703,000
S
Socket
Company
99,000
229,000
305,000
325,000
900,000
(250,000)
$1,608,000
$ 148,000
500,000
190,000
400,000
370,000
$1,608,000
Socket reported net income of $122.000 in 20x7 and paid dividends of $61,000. Its bonds have an annual interest rate of 8 percent
and are convertible into 33,000 common shares. Its preferred shares pay an 11 percent annual dividend and convert into 19,000 shares
of common stock. In addition, Socket has warrants outstanding for 10,000 shares of common stock at $8 per share. The 20X7 average
price of Socket common shares was $40.
Plug reported income of $330,000 from its own operations for 20X7 and paid dividends of $215.000. Its 10 percent bonds convert into
30,000 shares of its common stock. The companies file separate tax returns and are subject to income taxes of 40 percent
Required:
Compute basic and diluted EPS for the consolidated entity for 20x7. (Round your intermediate calculations and final answers to two
decimal places.)
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