Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me with the correct answer to Diluted Earnings Per Share. Following are separate income statements for Austin, Inc., and its 90 percent owned

Please help me with the correct answer to Diluted Earnings Per Share.

image text in transcribed

image text in transcribed

Following are separate income statements for Austin, Inc., and its 90 percent owned subsidiary, Rio Grande Corporation as well as a consolidated statement for the business combination as a whole Austin $ (718,000)(512,000) $(1,230,000) Rio Grande Consolidated Revenues Cost of goods sold Operating expenses Equity in earnings of Rio Grande Individual company net income Consolidated net income Noncontrolling interest in consolidated net income Consolidated net income attributable to Austin 406,000 104,000 90,000 $ (298,000) 306,000 76,000 712,000 201,000 $ (130,000) $ (317,000) 19,000 $ (298,000) Additional Informationn Annual excess fair over book value amortization of $26,000 resulted from the acquisition. .The parent applies the equity method to this investment. . Austin has 56,000 shares of common stock and 6,000 shares of preferred stock outstanding. Owners of the preferred stock are paid an annual dividend of $60,000, and each share can be exchanged for five shares of common stock . Rio Grande has 44,000 shares of common stock outstanding. The company also has 9,000 stock warrants outstanding. For $10, each warrant can be converted into a share of Rio Grande's common stock. Austin holds half of these warrants. The price of Rio Grande's common stock was $20 per share throughout the year. . Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes) was $28,000. These bonds can be exchanged for 19,000 shares of the subsidiary's common stock Determine Austin's basic and diluted EPS. (Round your final answers to 2 decimal places.) Answer is complete but not entirely correct. Earnings Per Share Basic 425 Diluted

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Lean Auditing Driving Added Value And Efficiency In Internal Audit

Authors: James C. Paterson

1st Edition

1118896882, 978-1118896884

More Books

Students also viewed these Accounting questions