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 Seed Company $ 86,000 $ 32,000 86,000 117,000 660,000 (215,000) 138,000 $ 872,000 $ 127,000 250,000 300,000 195,000 54,000 100,000 92,000 (76,000) $ 482,000 $ 52,000 200,000 100,000 130,000 $ 872,000 $ 482,000 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 $13,000. Poppy reports income from its separate operations of $52,000 and pays dividends of $22,000. Required: Compute basic and diluted EPS for the consolidated entity for 20X2. Note: Round your answers to 2 decimal places. Answer is complete but not entirely correct. Basic earnings per share $ 2.51 Diluted earnings per share $ 2.26 x
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 Seed Company $ 86,000 $ 32,000 86,000 117,000 660,000 (215,000) 138,000 $ 872,000 $ 127,000 250,000 300,000 195,000 54,000 100,000 92,000 (76,000) $ 482,000 $ 52,000 200,000 100,000 130,000 $ 872,000 $ 482,000 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 $13,000. Poppy reports income from its separate operations of $52,000 and pays dividends of $22,000. Required: Compute basic and diluted EPS for the consolidated entity for 20X2. Note: Round your answers to 2 decimal places. Answer is complete but not entirely correct. Basic earnings per share $ 2.51 Diluted earnings per share $ 2.26 x
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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nkt.4
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
Seed Company
$ 86,000
$ 32,000
86,000
117,000
660,000
(215,000)
138,000
$ 872,000
$ 127,000
250,000
300,000
195,000
54,000
100,000
92,000
(76,000)
$ 482,000
$ 52,000
200,000
100,000
130,000
$ 872,000
$ 482,000
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 $13,000.
Poppy reports income from its separate operations of $52,000 and pays dividends of $22,000.
Required:
Compute basic and diluted EPS for the consolidated entity for 20X2.
Note: Round your answers to 2 decimal places.
Answer is complete but not entirely correct.
Basic earnings per share
$
2.51
Diluted earnings per share
$
2.26 x
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