Exercise 10-16 (Algo) Effect of Convertible Preferred Stock on Earnings per Share LO 10-4

Pagle Corporation holds 80 percent of Standard Companys common shares. The companies report the following balance sheet data for December 31, 20X1:

	Pagle Corporation	Standard Company
Assets
Cash	$ 57,000	$ 47,000
Accounts Receivable	80,000	60,000
Inventory	127,000	77,000
Buildings and Equipment	720,000	290,000
Less: Accumulated Depreciation	(295,000)	(150,000)
Investment in Standard Company Stock	136,000
Total Assets	$ 825,000	$ 324,000
Liabilities and Owners Equity
Accounts Payable	$ 197,000	$ 54,000
Taxes Payable	78,000
Preferred Stock ($10 par value)	200,000	100,000
Common Stock:
$10 par value	100,000
$5 par value		50,000
Retained Earnings	250,000	120,000
Total Liabilities and Owners Equity	$ 825,000	$ 324,000

An 8 percent annual dividend is paid on the Pagle preferred stock and a 12 percent dividend is paid on the Standard preferred stock. Pagle's preferred shares are not convertible. Standards preferred shares can be converted into 15,000 shares of common stock at any time. For 20X1, Standard reports $46,000 of net income and pays total dividends of $25,000, and Pagle reports $63,000 of income from its separate operations and pays total dividends of $41,000.

Required:

Compute basic and diluted EPS for the consolidated entity for 20X1.

Note: Round your answers to 2 decimal places.