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The following separate income statements are for Mason and its 80 percent-owned subsidiary, Amortization expense resulting from Dixon's excess acquisition-date fair value is $25,000 per
The following separate income statements are for Mason and its 80 percent-owned subsidiary, Amortization expense resulting from Dixon's excess acquisition-date fair value is $25,000 per year. Mason has convertible preferred stock outstanding. Each of these 5,000 shares is paid a dividend of $4 per year. Each share can be converted into four shares of common stock. Stock warrants to buy 10,000 shares of Dixon are also outstanding. For $20, each warrant can be converted into a share of Dixon's common stock. The fair value of this stock is $25 throughout the year. Mason owns none of these warrants. Dixon has convertible bonds payable that paid interest of $30,000 (after taxes) during the year. These bonds can be exchanged for 20,000 shares of common stock. Mason holds 15 percent of these bonds, which it bought at book value directly from Dixon. Compute Mason's basic and diluted EPS
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