Exercise 10-15 (Algo) Effect of Convertible Bonds on Earnings per Share LO 10-4 Poppy Corporation owns 60 percent of Seed Company's common shares. Balance sheet data for the companies on December 31, 20X2, are as follows: Assets Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Seed Company Stock Total Assets Liabilities and Owners' Equity Accounts Payable Bonds Payable Common Stock ($10 par value) Retained Earnings Total Liabilities and Owners' Equity Poppy Seed Company Corporation $ 93,000 83,000 118,000 670,000 (225,000) 138,000 $ 877,000 $ 107,000 250,000 300,000 220,000 $ 31,000 58,000 100,000 90,000 (77,000) $ 502,000 $ 72,000 200,000 100,000 130,000 $ 877,000 $ 502,000 The bonds of Poppy Corporation and Seed Company pay annual interest of 8 percent and 10 percent, respectively. Poppy's bonds are not convertible. Seed's bonds can be converted into 10,000 shares of its company stock any time after January 1, 20X1. An income tax rate of 40 percent is applicable to both companies, Seed reports net income of $39,000 for 20X2 and pays dividends of $10,000 Poppy reports income from its separate operations of $49,000 and pays dividends of $23,000 Required: Compute basic and diluted EPS for the consolidated entity for 20X2 Note: Round your answers to 2 decimal places. Basic earnings per share Diluted earnings per share