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Following are separate income statements for Amarillo, Incorporated, and its 80 percent-owned subsidiary, Saltillo Corporation as well as a consolidated statement for the business combination
Following are separate income statements for Amarillo, Incorporated, and its 80 percent-owned subsidiary, Saltillo Corporation as well as a consolidated statement for the business combination as a whole (credit balances indicated by parentheses). Accounts Amarillo Saltillo Consolidated Revenues $ (714,000) $ (514,000) $ (1,228,000) Cost of goods sold 414,000 286,000 700,000 Operating expenses 114,000 84,000 223,000 Equity in earnings of Saltillo (95,200) 0 0 Individual company net income $ (281,200) $ (144,000) 0 Consolidated net income $ (305,000) Noncontrolling interest in consolidated net income (23,800) Consolidated net income attributable to Amarillo $ (281,200) Additional Information Annual excess fair over book value amortization of $25,000 resulted from the acquisition. The parent applies the equity method to this investment. Amarillo has 52,000 shares of common stock and 9,000 shares of preferred stock outstanding. Owners of the preferred stock are paid an annual dividend of $50,000, and each share can be exchanged for five shares of common stock. Saltillo has 34,000 shares of common stock outstanding. Saltillo has convertible bonds outstanding, none of which Amarillo owned. During the current year, total interest expense (net of taxes) was $29,000. These bonds can be exchanged for 22,000 shares of the subsidiary's common stock. Required: What are Amarillo's basic and diluted EPS
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