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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: Short Punch Manufacturing Corporation Retail Stores Assets Cash $ $ 57,000 109,000 270,000 37,000 89,000 Accounts Receivable Inventory 125,000 Land 110,000 80,000 Buildings and Equipment 500,000 340,000 Less: Accumulated Depreciation. (230,000) (145,000) Investment in Short Retail Stores 124,000 Total Assets $ 940,000 $ 526,000 Liabilities and Equity Accounts Payable $ 100,000 $ 61,000 Bonds Payable 280,000 200,000 200,000 110,000 Preferred Stock ($10 par value) Common Stock: $10 par value 150,000 $5 par value 100,000 55,000 Retained Earnings 210,000 Total Liabilities and Equity $ 940,000 $ 526,000 Short Retail's 8 percent preferred stock is convertible into 14,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $50,200 for 20X4 and paid dividends of $30,300. 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 $63,000. 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: Short Punch Manufacturing Corporation Retail Stores Assets Cash $ $ 57,000 109,000 270,000 37,000 89,000 Accounts Receivable Inventory 125,000 Land 110,000 80,000 Buildings and Equipment 500,000 340,000 Less: Accumulated Depreciation. (230,000) (145,000) Investment in Short Retail Stores 124,000 Total Assets $ 940,000 $ 526,000 Liabilities and Equity Accounts Payable $ 100,000 $ 61,000 Bonds Payable 280,000 200,000 200,000 110,000 Preferred Stock ($10 par value) Common Stock: $10 par value 150,000 $5 par value 100,000 55,000 Retained Earnings 210,000 Total Liabilities and Equity $ 940,000 $ 526,000 Short Retail's 8 percent preferred stock is convertible into 14,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $50,200 for 20X4 and paid dividends of $30,300. 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 $63,000. 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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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: Short Punch Manufacturing Corporation Retail Stores Assets Cash $ $ 57,000 109,000 37,000 89,000 Accounts Receivable Inventory 270,000 125,000 80,000 Land 110,000 Buildings and Equipment 500,000 340,000 Less: Accumulated Depreciation (230,000) (145,000) Investment in Short Retail Stores 124,000 Total Assets $ 940,000 $ 526,000 Liabilities and Equity Accounts Payable. $ 100,000 $ 61,000 Bonds Payable 280,000 200,000 200,000 110,000 Preferred Stock ($10 par value) Common Stock: $10 par value 150,000 $5 par value 100,000 55,000 Retained Earnings. 210,000 Total Liabilities and Equity $ 940,000 $ 526,000 Short Retail's 8 percent preferred stock is convertible into 14,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $50,200 for 20X4 and paid dividends of $30,300. 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 $63,000. 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
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: Short Punch Manufacturing Corporation Retail Stores Assets Cash $ $ 57,000 109,000 37,000 89,000 Accounts Receivable Inventory 270,000 125,000 80,000 Land 110,000 Buildings and Equipment 500,000 340,000 Less: Accumulated Depreciation (230,000) (145,000) Investment in Short Retail Stores 124,000 Total Assets $ 940,000 $ 526,000 Liabilities and Equity Accounts Payable. $ 100,000 $ 61,000 Bonds Payable 280,000 200,000 200,000 110,000 Preferred Stock ($10 par value) Common Stock: $10 par value 150,000 $5 par value 100,000 55,000 Retained Earnings. 210,000 Total Liabilities and Equity $ 940,000 $ 526,000 Short Retail's 8 percent preferred stock is convertible into 14,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $50,200 for 20X4 and paid dividends of $30,300. 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 $63,000. 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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