Homework Answers
a.
| Calculation of Basic EPS | |
| Revenues | 402000 |
| Less : Expenses | 290000 |
| Less: Preference Dividend (6000*$5) | 30000 |
| Add :Share in Foreman's Profit [80% * (92000-22000)] | 56000 |
| Net Income | 138000 |
| Outstanding Common shares | 50,000 |
| Basic EPS ( Net Income / Outstanding Common Shares) | 2.76 |
b.
| Calculation of Diluted EPS | |
| Net Income of Foreman (92000 - 22000) | 70000 |
| Share outstanding | 40000 |
| Converted warrants | 10000 |
| Less: No. of shares from Proceeds of conversion ( 10000 * 15) / 20 | 7500 |
| 42500 | |
| Burk's share in 40000 shares of Foreman (80%*40000) | 32000 |
| Income used in Diluted EPS | 70000 |
| Burks's share (32000 /42500) | 75.29% |
| Burk's share in Foreman's Income (75.29% * 70000) | 52,703 |
| Consolidated Income of Burk (138000 + 52703) | 190703 |
| Outstanding Common shares | 50,000 |
| Converted Preference Shares (6000 * 5) | 30000 |
| Total shares | 80000 |
| Diluted EPS (190703 / 80000) | 2.38 |
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Part III: Problems. Solve the Following problems. Show all Computations 1. The following separate income statements ar...
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