Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail
Stores. The companles' balance sheets as of December 31,204, were as follows: Short Retall's 8
percent preferred stock is convertible Into 15,000 shares of common stock, and its 10 percent
bonds are convertible Into 8,000 shares of common stock. Short reported net income of $52,400
for 204 and paid dividends of $30,600. Punch Manufacturing has 11 percent preferred stock and
12 percent bonds outstanding, nelther of which is convertible. Punch reported after-tax income,
excluding investment income from Short, of $125,000 in 204 and paid dividends of $67,000. The
companles file separate tax returns and are subject to a 40 percent income tax. Requlred:
Compute basic and diluted EPS for the consolidated entity. (Round your Intermedlate
calculations and final answers to two decimal places.).
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Punch Manufacturing Corporation owns 80 percent of the common shares .pdf
1. Punch Manufacturing Corporation owns 80 percent of the common shares of Short Retail
Stores. The companles' balance sheets as of December 31,204, were as follows: Short Retall's 8
percent preferred stock is convertible Into 15,000 shares of common stock, and its 10 percent
bonds are convertible Into 8,000 shares of common stock. Short reported net income of $52,400
for 204 and paid dividends of $30,600. Punch Manufacturing has 11 percent preferred stock and
12 percent bonds outstanding, nelther of which is convertible. Punch reported after-tax income,
excluding investment income from Short, of $125,000 in 204 and paid dividends of $67,000. The
companles file separate tax returns and are subject to a 40 percent income tax. Requlred:
Compute basic and diluted EPS for the consolidated entity. (Round your Intermedlate
calculations and final answers to two decimal places.)
