E10-14 Effect of Preferred Stock on Earnings per Share LO 10-4

Amber Corporation holds 70 percent of Newtop Companys voting common shares but none of its preferred shares. Summary balance sheets for the companies on December 31, 20X1, are as follows:

	Amber Corporation				Newtop Company
Assets
Cash		$	10,000			$	24,000
Accounts Receivable			35,000				45,000
Inventory			110,000				72,000
Buildings and Equipment			300,000				205,000
Less: Accumulated Depreciation			(133,000	)			(68,000	)
Investment in Newtop Company			120,400
Total Assets		$	442,400			$	278,000
Liabilities and Owners Equity
Accounts Payable		$	65,400			$	51,000
Wages Payable			47,000
Preferred Stock			100,000				55,000
Common Stock ($10 par value)			120,000				100,000
Retained Earnings			110,000				72,000
Total Liabilities and Owners Equity		$	442,400			$	278,000

Neither of the preferred issues is convertible. Ambers preferred pays a 9 percent annual dividend and Newtops preferred pays a 10 percent dividend. Newtop reported net income of $47,000 and paid a total of $23,000 of dividends in 20X1. Amber reported $61,000 of income from its separate operations and paid total dividends of $48,000 in 20X1.

Required:

Compute 20X1 consolidated EPS. Ignore any tax consequences. (Round your answer to 2 decimal places.)