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Additional Information Annual excess fair over book value amortization of $25,000 resulted from the acquisition. . The parent applies the equity method to this investment. • Austin has 60,000 shares of common stock and 15,000 shares of preferred stock outstanding. Owners of the preferred stock are paid an annual dividend of $40,000, and each share can be exchanged for two shares of common stock. • Rio Grande has 41,000 shares of common stock outstanding. The company also has 10,000 stock warrants outstanding. For $10, each warrant can be converted into a share of Rio Grande's common stock. Austin holds half of these warrants. The price of Rio Grande's common stock was $20 per share throughout the year. ⚫ Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes) was $45,000. These bonds can be exchanged for 14,000 shares of the subsidiary's common stock. Determine Austin's basic and diluted EPS. (Round your intermediate percentage value to 1 decimal place. Round your final answers to 2 decimal places.) Answer is complete but not entirely correct. Earnings Per Share Basic $ 3.45 Diluted $ 2.55

Additional Information Annual excess fair over book value amortization of $25,000 resulted from the acquisition. . The parent applies the equity method to this investment. • Austin has 60,000 shares of common stock and 15,000 shares of preferred stock outstanding. Owners of the preferred stock are paid an annual dividend of $40,000, and each share can be exchanged for two shares of common stock. • Rio Grande has 41,000 shares of common stock outstanding. The company also has 10,000 stock warrants outstanding. For $10, each warrant can be converted into a share of Rio Grande's common stock. Austin holds half of these warrants. The price of Rio Grande's common stock was $20 per share throughout the year. ⚫ Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes) was $45,000. These bonds can be exchanged for 14,000 shares of the subsidiary's common stock. Determine Austin's basic and diluted EPS. (Round your intermediate percentage value to 1 decimal place. Round your final answers to 2 decimal places.) Answer is complete but not entirely correct. Earnings Per Share Basic $ 3.45 Diluted $ 2.55

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 1MC
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Additional Information Annual excess fair over book value amortization of $25,000 resulted from the acquisition. . The parent applies the equity method to this investment. • Austin has 60,000 shares of common stock and 15,000 shares of preferred stock outstanding. Owners of the preferred stock are paid an annual dividend of $40,000, and each share can be exchanged for two shares of common stock. • Rio Grande has 41,000 shares of common stock outstanding. The company also has 10,000 stock warrants outstanding. For $10, each warrant can be converted into a share of Rio Grande's common stock. Austin holds half of these warrants. The price of Rio Grande's common stock was $20 per share throughout the year. ⚫ Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes) was $45,000. These bonds can be exchanged for 14,000 shares of the subsidiary's common stock. Determine Austin's basic and diluted EPS. (Round your intermediate percentage value to 1 decimal place. Round your final answers to 2 decimal places.) Answer is complete but not entirely correct. Earnings Per Share Basic $ 3.45 Diluted $ 2.55
Transcribed Image Text:Additional Information Annual excess fair over book value amortization of $25,000 resulted from the acquisition. . The parent applies the equity method to this investment. • Austin has 60,000 shares of common stock and 15,000 shares of preferred stock outstanding. Owners of the preferred stock are paid an annual dividend of $40,000, and each share can be exchanged for two shares of common stock. • Rio Grande has 41,000 shares of common stock outstanding. The company also has 10,000 stock warrants outstanding. For $10, each warrant can be converted into a share of Rio Grande's common stock. Austin holds half of these warrants. The price of Rio Grande's common stock was $20 per share throughout the year. ⚫ Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes) was $45,000. These bonds can be exchanged for 14,000 shares of the subsidiary's common stock. Determine Austin's basic and diluted EPS. (Round your intermediate percentage value to 1 decimal place. Round your final answers to 2 decimal places.) Answer is complete but not entirely correct. Earnings Per Share Basic $ 3.45 Diluted $ 2.55
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