Following are separate income statements for Alexander, Inc., and Raleigh Corporation as well as a consolidated statement for the business combination as a whole. LO4 Alexander Raleigh Consolidated Revenues.. .

$(700,000)

$(500,000)

$(1,000,000)

Cost of goodssold.

400,000 300,000 495,000 Operating expenses.

100,000 70,000 195,000 Equity in earnings of Raleigh . . .

(104,000)

-0-

-0-

Noncontrolling interest in Raleigh's income.

-0-

-0-

26,000 Netincome.

$(304,000)

$(130,000)

$ (284,000)

Additional Information

• Intercompany inventory transfers are all downstream.

• The parent applies the partial equity method to this investment.

• Alexander has 50,000 shares of common stock and 10,000 shares of preferred stock outstand¬ ing. Owners of the preferred stock are paid an annual dividend of $40,000, and each share can be exchanged for two shares of common stock.

• Raleigh has 30,000 shares of common stock outstanding. The company also has 5,000 stock warrants outstanding. For $10, each warrant can be converted into a share of Raleigh’s common stock. Alexander holds half ofthese warrants. The price of Raleigh’s common stock was $20 per share throughout the year.

• Raleigh also has convertible bonds, none of which Alexander owned. During the current year, total interest expense (net of taxes) was $22,000. These bonds can be exchanged for 10,000 shares of the subsidiary’s common stock.

Determine the basic and diluted EPS for this business combination.