The income statements of Pin Corporation and its 80 percent-owned subsidiary, Sal Corporation, for 2011 are as follows:

Note: Income from Sal is computed as [($26,400 reported income * 80%) - $2,000 patent amortization - $5,200 unrealized profit in Sal's inventory].Pin had 10,000 shares of common stock and 1,200 shares of $100 par, 10 percent cumulative preferred stock outstanding throughout 2011. Sal had 20,000 shares of common stock and warrants to purchase 5,000 shares of Sal common stock at $24 outstanding throughout 2011. The average market price of Sal common stock was $30 per share.REQUIRED: Compute Pin's (and consolidated) basic and dilutedEPS.

Transcribed Image Text:

Pin Sal $ 740,000 $1,270,000 13,920 (700,000) (462,000) 121,920 (41,453) $ 80,467 Sales Income from Sal (see note) Cost of sales (470,000) (230,000) 40,000 (13,600) $ 26,400 Expenses Income before taxes Provision for income taxes Net income