Question
Porter Corporation owns all 34,000 shares of the common stock of Street, Inc. Porter has 73,000 shares of its own common stock outstanding. During the
Porter Corporation owns all 34,000 shares of the common stock of Street, Inc. Porter has 73,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $290,000 while Street reports $236,000. Annual amortization of $15,000 is recognized each year on the consolidation worksheet based on acquisition-date fair-value allocations. Both companies have convertible bonds outstanding. During the current year, bond-related interest expense (net of taxes) is $57,000 for Porter and $39,000 for Street. Porters bonds can be converted into 13,000 shares of common stock; Streets bonds can be converted into 16,000 shares. Porter owns none of these bonds.
What are the earnings per share amounts that Porter should report in its current year consolidated income statement? (Round your answers to 2 decimal places.)
Basic
Diluted
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started