Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies' balance sheets as of December 31, 20X4, were as follows: Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Short Retail Stores Total Assets Liabilities and Equity Accounts Payable Bonds Payable Preferred Stock ($10 par value) Common Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Equity Punch Manufacturing Corporation $ 55,000 105,000 270,000 95,000 500,000 (240,000) 140,000 $ 925,000 $ 75,000 290,000 200,000 150,000 210,000 $ 925,000 Short Retail Stores $ 35,000 85,000 130,000 65,000 320,000 (125,000) $ 510,000 $ 55,000 200,000 80,000 100,000 75,000 $510,000 Short Retail's 8 percent preferred stock is convertible into 13,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $54,000 for 20X4 and paid dividends of $30,700. Punch Manufacturing has 11 percent preferred stock and 12 percent bonds outstanding, neither of which is convertible. Punch reported after-tax income, excluding investment income from Short, of $125,000 in 20X4 and paid dividends of $62,000. The companies file separate tax returns and are subject to a 40 percent income tax. Required: Compute basic and diluted EPS for the consolidated entity. (Round your intermediate calculations and final answers to two decimal places.) Basic earnings per share Diluted earnings per share
Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies' balance sheets as of December 31, 20X4, were as follows: Assets Cash Accounts Receivable Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Short Retail Stores Total Assets Liabilities and Equity Accounts Payable Bonds Payable Preferred Stock ($10 par value) Common Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Equity Punch Manufacturing Corporation $ 55,000 105,000 270,000 95,000 500,000 (240,000) 140,000 $ 925,000 $ 75,000 290,000 200,000 150,000 210,000 $ 925,000 Short Retail Stores $ 35,000 85,000 130,000 65,000 320,000 (125,000) $ 510,000 $ 55,000 200,000 80,000 100,000 75,000 $510,000 Short Retail's 8 percent preferred stock is convertible into 13,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $54,000 for 20X4 and paid dividends of $30,700. Punch Manufacturing has 11 percent preferred stock and 12 percent bonds outstanding, neither of which is convertible. Punch reported after-tax income, excluding investment income from Short, of $125,000 in 20X4 and paid dividends of $62,000. The companies file separate tax returns and are subject to a 40 percent income tax. Required: Compute basic and diluted EPS for the consolidated entity. (Round your intermediate calculations and final answers to two decimal places.) Basic earnings per share Diluted earnings per share
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies' balance sheets as of
December 31, 20X4, were as follows:
Assets
Cash
Accounts Receivable
Inventory
Land
Buildings and Equipment
Less: Accumulated Depreciation
Investment in Short Retail Stores
Total Assets
Liabilities and Equity
Accounts Payable
Bonds Payable
Preferred Stock ($10 par value)
Common Stock:
$10 par value
$5 par value
Retained Earnings
Total Liabilities and Equity
Punch Manufacturing
Corporation
$ 55,000
105,000
270,000
95,000
500,000
(240,000)
140,000
$ 925,000
$ 75,000
290,000
200,000
150,000
210,000
$ 925,000
Short
Retail Stores
$ 35,000
85,000
130,000
65,000
320,000
(125,000)
$ 510,000
$ 55,000
200,000
80,000
100,000
75,000
$510,000
Short Retail's 8 percent preferred stock is convertible into 13,000 shares of common stock, and its 10 percent bonds are convertible
into 8,000 shares of common stock. Short reported net income of $54,000 for 20X4 and paid dividends of $30,700.
Punch Manufacturing has 11 percent preferred stock and 12 percent bonds outstanding, neither of which is convertible. Punch reported
after-tax income, excluding investment income from Short, of $125,000 in 20X4 and paid dividends of $62,000. The companies file
separate tax returns and are subject to a 40 percent income tax.
Required:
Compute basic and diluted EPS for the consolidated entity. (Round your intermediate calculations and final answers to two decimal
places.)
Basic earnings per share
Diluted earnings per share
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