Computing consolidated earnings per share (EPS)

Assume the following facts about a parent and its 75% owned subsidiary company:

Parent Subsidiary Net income$210,000$49,000Common shares outstanding50,00028,000 (21,000 = 75% owned by parent)Convertible preferred stock Dividends = $20,100Convertible into 9,000shares of common stock Convertible bonds Interest expense after tax = $7,100Convertible into 6,000 shares of common stock

a. Compute basic earnings per share

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b. Compute diluted earnings per share

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