Exercise 10-15 (Algo) Effect of Convertible Bonds on Earnings per Share LO 10-4 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 $ 85,000 83,000 117,000 690,000 (215,000) 144,000 $904,000 Basic earnings per share Diluted earnings per share $ 159,000 250,000 300,000 195,000 Seed Company Required: Compute basic and diluted EPS for the consolidated entity for 20X2. Note: Round your answers to 2 decimal places. $ 35,000 56,000 100,000 90,000 (73,000) $ 488,000 $ 48,000 200,000 100,000 140,000 $904,000 $ 488,000 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 $35,000 for 20x2 and pays dividends of $16,000. Poppy reports income from its separate operations of $45,000 and pays dividends of $22,000.
Exercise 10-15 (Algo) Effect of Convertible Bonds on Earnings per Share LO 10-4 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 $ 85,000 83,000 117,000 690,000 (215,000) 144,000 $904,000 Basic earnings per share Diluted earnings per share $ 159,000 250,000 300,000 195,000 Seed Company Required: Compute basic and diluted EPS for the consolidated entity for 20X2. Note: Round your answers to 2 decimal places. $ 35,000 56,000 100,000 90,000 (73,000) $ 488,000 $ 48,000 200,000 100,000 140,000 $904,000 $ 488,000 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 $35,000 for 20x2 and pays dividends of $16,000. Poppy reports income from its separate operations of $45,000 and pays dividends of $22,000.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter14: Intercorporate Investments In Common Stock
Section: Chapter Questions
Problem 30P
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