Refer to the data in the preceding problem. Partial single-company income statements for Marmee Company and Small Enterprises are shown below for the first year after the merger.

Make the following assumptions:
(1) The income tax rate for the consolidated firm is 40 percent.
(2) Where necessary, the extra asset costs that must be recognized in the consolidated statement are amortized over 5 years, and the goodwill is amortized over 40 years.
(3) Amortization of asset costs and goodwill arising from the purchase are not deductible from taxable income in calculations for tax returns.
(4) Small Enterprises declared no dividends.
Prepare consolidated income statements and consolidated earnings per share for the first year following the merger. Assume that the merger is treated as a a Purchase.
b Pooling of interests.

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Marmee Small Company Enterprises Sales Other Revenues Total Revenues Expenses Except Income Taxes Pretax Income $2,000,000 50,000 $2,050,000 1,700,000 $ 350,000 $1,500,000 10,000 $1,510,000 1,300,000 $ 210,000