Poppy Corporation owns 60 percent of Seed Company's common shares. Balance sheet data for the companies on December 31, 20X2, are as follows: Assets Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Seed Company Stock Total Assets Liabilities and Owners' Equity Accounts Payable Bonds Payable Common Stock ($10 par value) Retained Earnings Total Liabilities and Owners' Equity Poppy Corporation $ 89,000 82,000 115,000 680 000 (240,000) 147,000 $ 873,000 $ 118,000 250,000 300,000 205,000 Seed Company $ 31,000 58,000 100,000 95,000 171,000) $ 513,000 $ 68,000 200,000 100,000 145,000 $ 873 000 $ 513,000 The bonds of Poppy Corporation and Seed Company pay annual interest of 8 percent and 10 percent, respectively. Poppy's bonds are not convertible. Seed's bonds can be converted into 10,000 shares of its company stock any time after January 1, 20X1. An income tax rate of 40 percent is applicable to both companies. Seed reports net income of $39,000 for 20X2 and pays dividends of $10,000. Poppy reports income from its separate operations of $49,000 and pays dividends of $21,000. Required: Compute basic and diluted EPS for the consolidated entity for 20×2. Note: Round your answers to 2 decimal places. Basic earnings per share Diluted earnings per share
Poppy Corporation owns 60 percent of Seed Company's common shares. Balance sheet data for the companies on December 31, 20X2, are as follows: Assets Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Seed Company Stock Total Assets Liabilities and Owners' Equity Accounts Payable Bonds Payable Common Stock ($10 par value) Retained Earnings Total Liabilities and Owners' Equity Poppy Corporation $ 89,000 82,000 115,000 680 000 (240,000) 147,000 $ 873,000 $ 118,000 250,000 300,000 205,000 Seed Company $ 31,000 58,000 100,000 95,000 171,000) $ 513,000 $ 68,000 200,000 100,000 145,000 $ 873 000 $ 513,000 The bonds of Poppy Corporation and Seed Company pay annual interest of 8 percent and 10 percent, respectively. Poppy's bonds are not convertible. Seed's bonds can be converted into 10,000 shares of its company stock any time after January 1, 20X1. An income tax rate of 40 percent is applicable to both companies. Seed reports net income of $39,000 for 20X2 and pays dividends of $10,000. Poppy reports income from its separate operations of $49,000 and pays dividends of $21,000. Required: Compute basic and diluted EPS for the consolidated entity for 20×2. Note: Round your answers to 2 decimal places. Basic earnings per share Diluted earnings per share
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
None
Transcribed Image Text:Poppy Corporation owns 60 percent of Seed Company's common shares. Balance sheet data for the companies on December 31,
20X2, are as follows:
Assets
Cash
Accounts Receivable
Inventory
Buildings and Equipment
Less: Accumulated Depreciation
Investment in Seed Company Stock
Total Assets
Liabilities and Owners' Equity
Accounts Payable
Bonds Payable
Common Stock ($10 par value)
Retained Earnings
Total Liabilities and Owners' Equity
Poppy
Corporation
$ 89,000
82,000
115,000
680 000
(240,000)
147,000
$ 873,000
$ 118,000
250,000
300,000
205,000
Seed
Company
$ 31,000
58,000
100,000
95,000
171,000)
$ 513,000
$ 68,000
200,000
100,000
145,000
$ 873 000 $ 513,000
The bonds of Poppy Corporation and Seed Company pay annual interest of 8 percent and 10 percent, respectively. Poppy's bonds are
not convertible. Seed's bonds can be converted into 10,000 shares of its company stock any time after January 1, 20X1. An income tax
rate of 40 percent is applicable to both companies. Seed reports net income of $39,000 for 20X2 and pays dividends of $10,000.
Poppy reports income from its separate operations of $49,000 and pays dividends of $21,000.
Required:
Compute basic and diluted EPS for the consolidated entity for 20×2.
Note: Round your answers to 2 decimal places.
Basic earnings per share
Diluted earnings per share
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education