Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Porter Corporation owns all 35,000 shares of the common stock of Street, Inc. Porter has 70,000 shares of its own common stock outstanding. During the

Porter Corporation owns all 35,000 shares of the common stock of Street, Inc. Porter has 70,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $252,000 while Street reports $228,000. Annual amortization of $11,000 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 $54,000 for Porter and $33,000 for Street. Porters bonds can be converted into 13,000 shares of common stock; Streets bonds can be converted into 15,000 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.)

a. basic EPS

b. diluted EPS

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

Step: 3

blur-text-image

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

Police Auditing Standards And Applications

Authors: Allan Y. Jiao

2nd Edition

0398090750, 978-0398090753

More Books

Students also viewed these Accounting questions