ADVANCED ACCOUNTING
13th Edition
ISBN: 9781264046263
Author: Hoyle
Publisher: MCG
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Chapter 6, Problem 40P
To determine
Compute basic and diluted EPS for Company B.
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The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:
Burks
Foreman
Revenues
$
(422,000
)
$
(322,000
)
Expenses
373,000
236,000
Gain on sale of equipment
0
(26,000
)
Equity earnings of subsidiary
(63,000
)
0
Net income
$
(112,000
)
$
(112,000
)
Outstanding common shares
60,000
33,000
Additional Information
Amortization expense resulting from Foreman’s excess acquisition-date fair value is $36,000 per year.
Burks has convertible preferred stock outstanding. Each of these 6,000 shares is paid a dividend of $4 per year. Each share can be converted into four shares of common stock.
Stock warrants to buy 14,000 shares of Foreman are also outstanding. For $10, each warrant can be converted into a share of Foreman’s common stock. The fair value of this stock is $20 throughout the year. Burks owns none of these warrants.
Foreman has convertible bonds payable…
The following separate income statements are for Burks Company and its 80 percent–owned subsidiary, Foreman Company:
Burks ForemanRevenues . . . . $(430,000) $(330,000)Expenses . . . . . 280,000 240,000Gain on sale –0– (30,000) of equipment Equity earnings of (64,000) -0-subsidiaryNet income . . $(214,000) $(120,000)Outstanding . . . 65000 40000 Common stock
Additional Information∙ Amortization expense resulting from Foreman’s excess acquisition-date fair value is $40,000 per year.∙ Burks has convertible preferred stock outstanding. Each of these 8,000 shares is paid a dividend of $4 per year. Each share can be converted into four shares of common stock.∙ Stock warrants to buy 20,000 shares of Foreman are also outstanding. For $15, each warrant can be converted into a share of Foreman’s common stock. The fair value of this stock is $20 throughout the year. Burks owns none of these…
The following separate income statements are for Burks Company and its 80 percent-owned subsidiary, Foreman Company:
Foreman
$ (332,000)
241,000
(31,000)
Revenues
Expenses
Gain on sale of equipment
Equity earnings of subsidiary
Net income
Outstanding common shares
Additional Information
Burks
$ (400,000)
286,000
Basic
Diluted
0
(65,000)
$ (179,000)
63,000
• Amortization expense resulting from Foreman's excess acquisition-date fair value is $35,000 per year.
• Burks has convertible preferred stock outstanding. Each of these 9,000 shares is paid a dividend of $5 per year. Each share can be
converted into five shares of common stock.
• Stock warrants to buy 10,000 shares of Foreman are also outstanding. For $16, each warrant can be converted into a share of
Foreman's common stock. The fair value of this stock is $20 throughout the year. Burks owns none of these warrants.
• Foreman has convertible bonds payable that paid interest of $46,000 (after taxes) during the year. These bonds can be…
Chapter 6 Solutions
ADVANCED ACCOUNTING
Ch. 6 - Prob. 1QCh. 6 - Prob. 2QCh. 6 - When is a firm required to consolidate the...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - How do noncontrolling interest balances affect the...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Problems 7 and 8 are based on the following...Ch. 6 - Prob. 8PCh. 6 - Bens man Corporation is computing EPS. One of its...Ch. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 15PCh. 6 - Prob. 16PCh. 6 - On January 1, Coldwater Company has a net book...Ch. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - On January 1, 2018, Stamford issues 10,000...Ch. 6 - On January 1, 2018, Stamford reacquires 8,000 of...Ch. 6 - Prob. 23PCh. 6 - Prob. 24PCh. 6 - On December 31, 2017. PanTech Company invests...Ch. 6 - Prob. 26PCh. 6 - Prob. 27PCh. 6 - Prob. 28PCh. 6 - Prob. 29PCh. 6 - Prob. 30PCh. 6 - Prob. 31PCh. 6 - Prob. 32PCh. 6 - Prob. 33PCh. 6 - Prob. 34PCh. 6 - Prob. 35PCh. 6 - Alford Company and its 80 percentowned subsidiary,...Ch. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42PCh. 6 - Prob. 43PCh. 6 - Prob. 44PCh. 6 - Fred, Inc., and Herman Corporation formed a...Ch. 6 - Prob. 46PCh. 6 - Prob. 47PCh. 6 - Prob. 48PCh. 6 - Prob. 49PCh. 6 - Prob. 50PCh. 6 - Prob. 1DYSCh. 6 - Prob. 2DYSCh. 6 - The FASB ASC Subtopic Variable Interest Entities...
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