E10-14 Effect of Preferred Stock on Earnings per Share LO 10-4 Poison Corporation holds 70 percent of Snake Company's voting common shares but none of its preferred shares. Summary balance sheets for the companies on December 31, 20X1. are as follows: Poison Corporation Snake Company Assets Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Snake Company Total Assets Liabilities and Owners' Equity Accounts Payable Wages Payable Preferred Stock Common Stock ($10 par value) Retained Earnings Total Liabilities and Owners' Equity $ 14,000 39,000 110,000 295,000 (134,000) 123,200 $ 447,200 $ 23,000 49,000 75.000 210,000 (62,000) $295,000 $ 63,000 $ 87,200 40,000 100,000 120,000 100,000 $ 447,200 56,000 100,000 76,000 $295,000 Neither of the preferred issues is convertible. Poison's preferred pays a 9 percent annual dividend and Snake's preferred pays a 10 percent dividend. Snake reported net income of $47,000 and paid a total of $22,000 of dividends in 20X1. Poison reported $64,000 of income from its separate operations and paid total dividends of $46,000 in 20X1. Required: Compute 20X1 consolidated EPS. Ignore any tax consequences. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Consolidated earnings per share $ 6.50