Eagle Corporation holds 80 percent of Standard Company€™s common shares. The companies report the following balance sheet data for December 31, 20X1:

An 8 percent annual dividend is paid on the Eagle preferred stock and a 12 percent dividend is paid on the Standard preferred stock. Eagle's preferred shares are not convertible. Standard's preferred shares can be converted into 15,000 shares of common stock at any time. For 20X1, Standard reports $45,000 of net income and pays total dividends of $20,000, and Eagle reports $60,000 of income from its separate operations and pays total dividends of $35,000.

Required
Compute basic and diluted EPS for the consolidated entity for20X1.

Transcribed Image Text:

Eagle Corporation Cash Accounts Receivable Inventory Buildings & Equipment Less: Accumulated Depreciation Investment in Standard Company Stock Total Assets 50,000 80,000 140,000 700,000 (280,000) 160,000 $850,000 Standard Company 40,000 60,000 90,000 300,000 (140,000) $120,000 80,000 200,000 50,000 Accounts Payable Taxes Payable Preferred Stock ($10 par value) Common Stock: 100,000 $10 par value $5 par value Retained Earnings 100,000 50,000 150,000 350,000 5850,000 Total Liabilities & Owners' Equity