Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Basic and diluted eps please! Following are separate income statements for Austin, Inc., and its 90 percent owned subsidiary, Rio Grande Corporation as well as

image text in transcribedBasic and diluted eps please!
Following are separate income statements for Austin, Inc., and its 90 percent owned subsidiary, Rio Grande Corporation as well as a consolidated statement for the business combination as a whole. Additional Information Annual excess fair over book value amortization of $49,000 resulted from the acquisition The parent applies the equity method to this investment. Austin has 60,000 shares of common stock and 16.000 shares of preferred stock outstanding. Owners of stock are paid an annual dividend of $50,000, and each share can be exchanged for two shares of common stock. Rio Grande has 29,000 shares of common stock outstanding. The company also has 6,000 stock warrants outstanding. For $10, each warrant can be converted into a share of Rio Grande's common stock. Austin holds half of these warrants. The price of Rio Grande's common stock was $20 per share throughout the year. Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes) was $46,000. These bonds can be exchanged for 14.000 shares of the subsidiary's common stock. Determine Austin's basic and diluted EPs. (Round your final answers to 2 decimal places)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

Write a program to check an input year is leap or not.

Answered: 1 week ago

Question

Write short notes on departmentation.

Answered: 1 week ago

Question

What are the factors affecting organisation structure?

Answered: 1 week ago

Question

What are the features of Management?

Answered: 1 week ago

Question

Briefly explain the advantages of 'Management by Objectives'

Answered: 1 week ago