Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies' balance sheets as of December 31, 20X4, were as follows: Assets Cash Accounts Receivable. Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Short Retail Stores Total Assets Liabilities and Equity Accounts Payable Bonds Payable Preferred Stock ($10 par value) Connon Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Equity Punch Manufacturing Corporation $ 51,000 100,000 280,000 110,000 500,000 (225,000) 136,000 $ 952,000 Basic earnings per share Diluted earnings per share $ 142,000 260,000 200,000 150,000 200,000 $ 952,000 Short Retall Stores $ 31,000 80,000 135,000 80,000 320,000 (120,000) $ 526,000 $ 66,000 200,000 90,000 100,000 70,000 $ 526,000 Short Retall's 8 percent preferred stock is convertible Into 14,000 shares of common stock, and its 10 percent bonds are convertible Into 8,000 shares of common stock Short reported net Income of $52,000 for 20X4 and paid dividends of $30,800 Punch Manufacturing has 11 percent preferred stock and 12 percent bonds outstanding, neither of which is convertible Punch reported after-tax income, excluding investment income from Short, of $100,000 in 20x4 and paid dividends of $62,000. The companies file separate tax returns and are subject to a 40 percent Income tax Required: Compute basic and diluted EPS for the consolidated entity. (Round your intermediate calculations and final answers to two decimal places)
Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies' balance sheets as of December 31, 20X4, were as follows: Assets Cash Accounts Receivable. Inventory Land Buildings and Equipment Less: Accumulated Depreciation Investment in Short Retail Stores Total Assets Liabilities and Equity Accounts Payable Bonds Payable Preferred Stock ($10 par value) Connon Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Equity Punch Manufacturing Corporation $ 51,000 100,000 280,000 110,000 500,000 (225,000) 136,000 $ 952,000 Basic earnings per share Diluted earnings per share $ 142,000 260,000 200,000 150,000 200,000 $ 952,000 Short Retall Stores $ 31,000 80,000 135,000 80,000 320,000 (120,000) $ 526,000 $ 66,000 200,000 90,000 100,000 70,000 $ 526,000 Short Retall's 8 percent preferred stock is convertible Into 14,000 shares of common stock, and its 10 percent bonds are convertible Into 8,000 shares of common stock Short reported net Income of $52,000 for 20X4 and paid dividends of $30,800 Punch Manufacturing has 11 percent preferred stock and 12 percent bonds outstanding, neither of which is convertible Punch reported after-tax income, excluding investment income from Short, of $100,000 in 20x4 and paid dividends of $62,000. The companies file separate tax returns and are subject to a 40 percent Income tax Required: Compute basic and diluted EPS for the consolidated entity. (Round your intermediate calculations and final answers to two decimal places)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail Stores. The companies' balance sheets as of
December 31, 20X4, were as follows:
Assets
Cash
Accounts Receivable.
Inventory
Land
Buildings and Equipment
Less: Accumulated Depreciation
Investment in Short Retail Stores
Total Assets
Liabilities and Equity
Accounts Payable
Bonds Payable
Preferred Stock ($10 par value)
Connon Stock:
$10 par value
$5 par value
Retained Earnings
Total Liabilities and Equity
Punch Manufacturing
Corporation
$ 51,000
100,000
280,000
110,000
500,000
(225,000)
136,000
$ 952,000
Basic earnings per share
Diluted earnings per share
$ 142,000
260,000
200,000
150,000
200,000
$952,000
Short
Retall Stores
$ 31,000
80,000
135,000
80,000
320,000
(120,000)
$ 526,000
$ 66,000
200,000
90,000
100,000
70,000
$ 526,000
Short Retail's 8 percent preferred stock is convertible Into 14,000 shares of common stock, and Its 10 percent bonds are convertible
Into 8,000 shares of common stock Short reported net Income of $52,000 for 20X4 and paid dividends of $30.800
Punch Manufacturing has 11 percent preferred stock and 12 percent bonds outstanding, neither of which is convertible. Punch reported
after-tax income, excluding investment income from Short, of $100,000 in 20x4 and paid dividends of $62,000. The companies file
separate tax returns and are subject to a 40 percent Income tax
Required:
Compute basic and diluted EPS for the consolidated entity. (Round your intermediate calculations and final answers to two decimal
places.)
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