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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) Common Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Equity Punch Manufacturing Corporation $ 55,000 105,000 270,000 95,000 500,000 (240,000) 140,000 $ 925,000 $ 75,000 290,000 200,000 150,000 210,000 $ 925,000 Short Retail Stores $ 35,000 85,000 130,000 65,000 320,000 (125,000) $ 510,000 $ 55,000 200,000 80,000 100,000 75,000 $510,000 Short Retail's 8 percent preferred stock is convertible into 13,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $54,000 for 20X4 and paid dividends of $30,700. 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 $125,000 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.) Basic earnings per share Diluted earnings per share

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) Common Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Equity Punch Manufacturing Corporation $ 55,000 105,000 270,000 95,000 500,000 (240,000) 140,000 $ 925,000 $ 75,000 290,000 200,000 150,000 210,000 $ 925,000 Short Retail Stores $ 35,000 85,000 130,000 65,000 320,000 (125,000) $ 510,000 $ 55,000 200,000 80,000 100,000 75,000 $510,000 Short Retail's 8 percent preferred stock is convertible into 13,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $54,000 for 20X4 and paid dividends of $30,700. 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 $125,000 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.) Basic earnings per share Diluted earnings per share

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PB
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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) Common Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Equity Punch Manufacturing Corporation $ 55,000 105,000 270,000 95,000 500,000 (240,000) 140,000 $ 925,000 $ 75,000 290,000 200,000 150,000 210,000 $ 925,000 Short Retail Stores $ 35,000 85,000 130,000 65,000 320,000 (125,000) $ 510,000 $ 55,000 200,000 80,000 100,000 75,000 $510,000 Short Retail's 8 percent preferred stock is convertible into 13,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $54,000 for 20X4 and paid dividends of $30,700. 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 $125,000 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.) Basic earnings per share Diluted earnings per share
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) Common Stock: $10 par value $5 par value Retained Earnings Total Liabilities and Equity Punch Manufacturing Corporation $ 55,000 105,000 270,000 95,000 500,000 (240,000) 140,000 $ 925,000 $ 75,000 290,000 200,000 150,000 210,000 $ 925,000 Short Retail Stores $ 35,000 85,000 130,000 65,000 320,000 (125,000) $ 510,000 $ 55,000 200,000 80,000 100,000 75,000 $510,000 Short Retail's 8 percent preferred stock is convertible into 13,000 shares of common stock, and its 10 percent bonds are convertible into 8,000 shares of common stock. Short reported net income of $54,000 for 20X4 and paid dividends of $30,700. 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 $125,000 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.) Basic earnings per share Diluted earnings per share
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