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Below is a partial balance sheet of Homer and Bart Companies Homer owns 100% of the voting stock of Bart Company Homer acquired Bart at
Below is a partial balance sheet of Homer and Bart Companies | |||||
Homer owns 100% of the voting stock of Bart Company | |||||
Homer acquired Bart at book value and Homer uses initial value (cost method) and Bart does | |||||
not pay any dividends on common stock | |||||
Homer Company | |||||
Shares of common stock | 100,000 | ||||
unconsolidated income | $900,000 | ||||
Bart Company | |||||
shares of common stock | 20000 | ||||
6% 10 par preferred stock | $20,000 | ||||
net income (before any dividends) | $80,000 | ||||
THE PREFERRED STOCK IS NOT OWNED BY HOMER BUT AN OUTSIDE INVESTOR | |||||
REQUIRED: | |||||
A) The preferred stock is NOT convertible and is cumulative | |||||
What is eps for Homer? | |||||
B) The preferred stock is Convertible (each share of preferred stock | |||||
can be converted into 5 shares of Bart common stock | |||||
What is eps for Homer |
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