Porter Corporation owns all 30,000 shares of the common stock of Street, Inc. Porter has 65,000...
Porter Corporation owns all 30,000 shares of the common stock of Street, Inc. Porter has 65,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $239,000 while Street reports $191,000. Annual amortization of $14,000 is recognized each year on the consolidation worksheet based on acquisition-date fair-value allocations. Both companies have convertible bonds outstanding. During the current year, bond-related interest expense (net of taxes) is $51,000 for Porter and $43,000 for Street. Porter’s bonds can be converted into 8,000 shares of common stock; Street’s bonds can be converted into 10,000 shares. Porter owns none of these bonds. What are the earnings per share amounts that Porter should report in its current year consolidated income statement
Homework Answers
ANSWER
Basic EPS-Porter Company
Porter's reported income-$239,000
Street's reported income -$191,000
Amortization expenses- ($14,000)
Consolidated net income (all to Porter)- $416,000
Porter's shares outstanding-65,000 shares
Basic earnings per share= $416,000/ 65,000 shares
=$6.4
Diluted EPS-Street Company:-
Street earnings after amortization-$177,000 ($191,000-$14,000)
Shares outstanding - 30,000 shares
Basic earnings per share= $177,000/ 30,000 shares
=$5.9 per share
Street's earnings assuming conversion of its bonds
=$177,000+$43,000 interest saved net of tax= $220,000
Street's shares assuming conversion of its bonds
30,000 +10,000 shares= 40,000 shares
Diluted earnings per share= $220,000/ 40,000 shares
=$5.5 per share
Because diluted earnings per share are less than basic earnings per share, the convertible bonds are dilutive and should be included.
Porter's share of Street's diluted earnings:-
Total shares assuming Street bond conversion- 40,000
Shares owned by Porter-30,000
Porter's ownership percentage- (30,000/ 40,000)=75%
Street's earnings for diluted EPS (above)-$220,000
Porter's ownership percentage= 75%
Earnings attributed to Porter Company- $165,000
Porter's earnings and shares for diluted EPS
Porter's separate income =$239,000
Street's income applicable to Porter (above)-$165,000
Interest saved (net of tax) on assumed
Conversion of Porter's bonds-$51,000
Diluted earnings to Porter-$455,000
Porter shares outstanding-65,000
additional shares from assumed bonds conversion-8,000
Diluted shares= 73,000
Consolidated income statement EPS amounts for Porter Company
Basic earnings per share= (above)-$6.4
Diluted earnings per share-$455,000/ 73,000 shares= $6.22 per share
---------------------------------------------------------------------
DEAR STUDENT,
If you have any query or any Explanation please ask me in
the comment box, i am here to helps you.please give me positive
rating.
*****************THANK YOU**************
Add Answer to:
Porter Corporation owns all 30,000 shares of the common stock of
Street, Inc. Porter has 65,000...
Porter Corporation owns all 30,000 shares of the common stock of Street, Inc. Porter has 65,000...
Porter Corporation owns all 30,000 shares of the common stock of Street, Inc. Porter has 65,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $183,000 while Street reports $143,000. Annual amortization of $14,000 is recognized each year on the consolidation worksheet based on acquisition-date fair-value allocations. Both companies have convertible bonds outstanding. During the current year, bond-related interest expense (net of taxes) is $35,000...
Porter Corporation owns all 24,000 shares of the common stock of Street, Inc. Porter has 66,000...
Porter Corporation owns all 24,000 shares of the common stock of Street, Inc. Porter has 66,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $222,000 while Street reports $121,000. Annual amortization of $13,000 is recognized each year on the consolidation worksheet based on acquisition-date fair-value allocations. Both companies have convertible bonds outstanding. During the current year, bond-related interest expense (net of taxes) is $30,000...
Porter Corporation owns all 30,000 shares of the common stock of Street, Inc. Porter has 70,000...
Porter Corporation owns all 30,000 shares of the common stock of Street, Inc. Porter has 70,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $227,000 while Street reports $159,000. Annual amortization of $15,000 is recognized each year on the consolidation worksheet based on acquisition- E date fair-value allocations. Both companies have convertible bonds outstanding. During the current year, bond-related interest expense (net of taxes)...
Porter Corporation owns all 26,000 shares of the common stock of Street, Inc. Porter has 60,000...
Porter Corporation owns all 26,000 shares of the common stock of Street, Inc. Porter has 60,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $211,000 while Street reports $161,000. Annual amortization of $18,000 is recognized each year on the consolidation worksheet based on acquisition date fair-value allocations. Both companies have convertible bonds outstanding. During the current year, bond-related interest expense (net of taxes) is...
Porter Corporation owns all 35,000 shares of the common stock of Street, Inc. Porter has 70,000...
Porter Corporation owns all 35,000 shares of the common stock of Street, Inc. Porter has 70,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $259,000 while Street reports $234,000. Annual amortization of $10,000 is recognized each year on the consolidation worksheet based on acquisition-date fair-value allocations. Both companies have convertible bonds outstanding. During the current year, bond-related interest expense (net of taxes) is $56,000...
please answer Porter Corporation owns all 34,000 shares of the common stock of Street, Inc. Porter...
please answer
Porter Corporation owns all 34,000 shares of the common stock of Street, Inc. Porter has 73,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $251,000 while Street reports $206,000. Annual amortization of $19,000 is recognized each year on the consolidation worksheet based on acquisition-date fair-value allocations. Both companies have convertible bonds outstanding During the current year, bond-related interest expense (net of taxes)...
Primus, Inc., owns all outstanding stock of Sonston, Inc. For the current year, Primus reports net...
Primus, Inc., owns all outstanding stock of Sonston, Inc. For the current year, Primus reports net income (exclusive of any investment income) of $520,000. Primus has 50,000 shares of common stock outstanding. Sonston reports net income of $120,000 for the period with 40,000 shares of common stock outstanding. Sonston also has 10,000 stock warrants outstanding that allow the holder to acquire shares at $15.00 per share. The value of this stock was $30 per share throughout the year. Primus owns...
D owns all 30,000 shares of common stock of B. D has 60,000 shares of its...
D owns all 30,000 shares of common stock of B. D has 60,000 shares of its own common stock outstanding. During the year D earns $200,000 none included from B, while B reports $150,000. Annual amortization of $10,000 is recognized each year on the consolidated worksheet based on acquisition date fair values. Both companies have convertible bonds outstanding. During the current year bond related interest expense (net of taxes) is $32,000 for D and 24,000 for B. D’s bonds can...
During 2015, Arbon Valley Company has 500,000 shares of par $1 common stock, 20,000 shares of...
During 2015, Arbon Valley Company has 500,000 shares of par $1 common stock, 20,000 shares of convertible, 4% cumulative preferred stock (par value is $50), $600,000 of 7% convertible bonds, $800,000 of 9% convertible bonds, and 120,000 stock options for employees to purchase shares of common stock for $20 per share. The preferred stock, bonds, and options were outstanding through the entire year. Dividends were not paid on the preferred stock during the year. The tax rate is 40%. Each...
Throughout 2014, H had 3,770,000 shares of common stock issued and outstanding and 100,000 shares of...
Throughout 2014, H had 3,770,000 shares of common stock issued and outstanding and 100,000 shares of 6%, $50 par value convertible preferred stock issued outstanding. Each share of preferred stock can be converted into 4 shares of B’s common stock. H’s net income for 2014 was $9,420,000. During 2014 H paid $300,000 of preferred dividends. H’s income tax rate is 20%. During the entire year ending 12-31-14, H had 400,000 outstanding and exercisable employee stock options that were granted to...
Porter Corporation owns all 30,000 shares of the common stock of Street, Inc. Porter has 65,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $183,000 while Street reports $143,000. Annual amortization of $14,000 is recognized each year on the consolidation worksheet based on acquisition-date fair-value allocations. Both companies have convertible bonds outstanding. During the current year, bond-related interest expense (net of taxes) is $35,000...
Porter Corporation owns all 30,000 shares of the common stock of Street, Inc. Porter has 70,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $227,000 while Street reports $159,000. Annual amortization of $15,000 is recognized each year on the consolidation worksheet based on acquisition- E date fair-value allocations. Both companies have convertible bonds outstanding. During the current year, bond-related interest expense (net of taxes)...
Porter Corporation owns all 26,000 shares of the common stock of Street, Inc. Porter has 60,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $211,000 while Street reports $161,000. Annual amortization of $18,000 is recognized each year on the consolidation worksheet based on acquisition date fair-value allocations. Both companies have convertible bonds outstanding. During the current year, bond-related interest expense (net of taxes) is...
Porter Corporation owns all 35,000 shares of the common stock of Street, Inc. Porter has 70,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $259,000 while Street reports $234,000. Annual amortization of $10,000 is recognized each year on the consolidation worksheet based on acquisition-date fair-value allocations. Both companies have convertible bonds outstanding. During the current year, bond-related interest expense (net of taxes) is $56,000...
please answer
Porter Corporation owns all 34,000 shares of the common stock of Street, Inc. Porter has 73,000 shares of its own common stock outstanding. During the current year, Porter earns net income (without any consideration of its investment in Street) of $251,000 while Street reports $206,000. Annual amortization of $19,000 is recognized each year on the consolidation worksheet based on acquisition-date fair-value allocations. Both companies have convertible bonds outstanding During the current year, bond-related interest expense (net of taxes)...
Primus, Inc., owns all outstanding stock of Sonston, Inc. For the current year, Primus reports net income (exclusive of any investment income) of $520,000. Primus has 50,000 shares of common stock outstanding. Sonston reports net income of $120,000 for the period with 40,000 shares of common stock outstanding. Sonston also has 10,000 stock warrants outstanding that allow the holder to acquire shares at $15.00 per share. The value of this stock was $30 per share throughout the year. Primus owns...
Most questions answered within 3 hours.
-
1-Write an algorithm to get two numbers from the user (as
inputs) and calculate the sum...
asked 20 minutes ago -
Define white-collar crime. What is the difference between
offender and offense-based definitions of white-collar crime? What...
asked 1 hour ago -
Consider a reaction which is 1st order with respect to A and 1st
order with respect...
asked 1 hour ago -
c++
The length of the hypotenuse of a right-angled triangle is the
square root of the...
asked 1 hour ago -
When a metal rod is heated, not only its resistance but also its
length and cross‐sectional...
asked 1 hour ago -
write a c++ program that computes the L^1 - Norm of a given
vector (L^1 norm...
asked 1 hour ago -
A manufacturer of banana chips would like to know whether its
bag filling machine works correctly...
asked 1 hour ago -
Complete the chapter case, "Turnover Analysis".
Chapter Case
Turnover Analysis
You recently completed your company’s new...
asked 1 hour ago -
What is the pH of solutions having the following H3O+
concentrations? Identify each as acidic, basic,...
asked 1 hour ago -
How does over-voltage of the diode usually occur?
asked 1 hour ago -
If you step on a dirty nail, your doctor will recommend you
update your Tetanus vaccination....
asked 1 hour ago -
Suppose that decreases in the price of milk lead to decrease s
in the retail prices...
asked 2 hours ago