Question

Bravo, Inc., owns all of the stock of Echo, Inc. For 2021, Bravo reports income (exclusive...

Bravo, Inc., owns all of the stock of Echo, Inc. For 2021, Bravo reports income (exclusive of any investment income) of $480,000. Bravo has 80,000 shares of common stock outstanding. It also has 5,000 shares of preferred stock outstanding that pay a dividend of $15,000 per year. Echo reports net income of $290,000 for the period with 80,000 shares of common stock outstanding. Echo also has a liability from its 10,000, $100 bonds that pay annual interest of $8 per bond. Each of these bonds can be converted into two shares of common stock. Bravo owns none of these bonds. Assume a tax rate of 21 percent.

What amount should Bravo report as diluted earnings per share?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:
Given the data Bravo Inc owns all of the stock of Simon for 2021 Bravo reports income.

Net Income = $290000
Interest saved farm (net of tax) = 63200
Earnings per Diluted EPS = $290000 + 63200= $353200
Share outstanding = $80000
Assume conversion of bonds = $30000
Subsidiary shares for parents share of diluted earnings = $110000
Share controlled by Garfun = 80000/110000 = 73%
Income to be included in parents diluted EPS = $353200 x 73% = $257836

Earning for Parents diluted EPS:-

Net Income Bravo = 480000
Divided to Bravo preferred stock = $15000
Net Income included Simon = $257836
Total earnings for diluted EPS = $480000+15000+257836= $752836
Bravo Diluted earnings for share = $752836/80000 = $9.41

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Bravo, Inc., owns all of the stock of Echo, Inc. For 2021, Bravo reports income (exclusive...
Bravo, Inc., owns all of the stock of Echo, Inc. For 2021, Bravo reports income (exclusive of any investment income) of $480,000. Bravo has 80,000 shares of common stock outstanding. It also has 5,000 shares of preferred stock outstanding that pay a dividend of $15,000 per year. Echo reports net income of $290,000 for the period with 80,000 shares of common stock outstanding. Echo also has a liability from its 10,000, $100 bonds that pay annual interest of $8 per...
Bravo, Inc., owns all of the stock of Echo, Inc. For 2021, Bravo reports income (exclusive...
Bravo, Inc., owns all of the stock of Echo, Inc. For 2021, Bravo reports income (exclusive of any investment income) of $480,000. Bravo has 80,000 shares of common stock outstanding. It also has 5,000 shares of preferred stock outstanding that pay a dividend of $15,000 per year. Echo reports net income of $290,000 for the period with 80,000 shares of common stock outstanding. Echo also has a liability from its 10,000, $100 bonds that pay annual interest of $8 per...
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 $616,000. Primus has 50,000 shares of common stock outstanding. Sonston reports net income of $216,000 for the period with 40,000 shares of common stock outstanding. Sonston also has 5,000 stock warrants outstanding that allow the holder to acquire shares at $11.00 per share. The value of this stock was $22 per share throughout the year. Primus owns...
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 $496,000. Primus has 50,000 shares of common stock outstanding. Sonston reports net income of $96,000 for the period with 40,000 shares of common stock outstanding. Sonston also has 5,000 stock warrants outstanding that allow the holder to acquire shares at $12.50 per share. The value of this stock was $25 per share throughout the year. Primus owns...
Paul Company had 100,000 shares of common stock outstanding on January 1, 2021. On September 30,...
Paul Company had 100,000 shares of common stock outstanding on January 1, 2021. On September 30, 2021, Paul sold 58,000 shares of common stock for cash. Paul also had 15,000 shares of convertible preferred stock outstanding throughout 2021. The preferred stock is $100 par, 7%, and is convertible into 3 shares of common for each share of preferred. Paul also had 600, 9%, convertible bonds outstanding throughout 2021. Each $1,000 bond is convertible into 30 shares of common stock. The...
The information below pertains to Tamarisk Company for 2021. Net income for the year $1,140,000 6%...
The information below pertains to Tamarisk Company for 2021. Net income for the year $1,140,000 6% convertible bonds issued at par ($1,000 per bond); each bond is convertible into     30 shares of common stock 1,990,000 6% convertible, cumulative preferred stock, $100 par value; each share is convertible      into 3 shares of common stock 4,110,000 Common stock, $10 par value 6,020,000 Tax rate for 2021 20% Average market price of common stock $25 per share There were no changes during...
Information from the financial statements of Ames Fabricators, Inc., included the following:    December 31 2021...
Information from the financial statements of Ames Fabricators, Inc., included the following:    December 31 2021 2020 Common shares 100,000 100,000 Convertible preferred shares (convertible into 80,000 shares of common) 31,200 31,200 8% convertible bonds (convertible into 30,000 shares of common) $ 1,000,000 $ 1,000,000 Ames’s net income for the year ended December 31, 2021, is $820,000. The income tax rate is 25%. Ames paid dividends of $5 per share on its preferred stock during 2021. Required: Compute basic and...
Sunland Company had 204000 shares of common stock, 21000 shares of convertible preferred stock, and $592000...
Sunland Company had 204000 shares of common stock, 21000 shares of convertible preferred stock, and $592000 of 11% convertible bonds outstanding during 2021. The preferred stock is convertible into 40400 shares of common stock. During 2021, Sunland paid dividends of $0.54 per share on the common stock and $1.80 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 2021 was $357000 and the income tax rate was 25%....
Sheridan Company had 206000 shares of common stock, 20000 shares of convertible preferred stock, and $598000...
Sheridan Company had 206000 shares of common stock, 20000 shares of convertible preferred stock, and $598000 of 12% convertible bonds outstanding during 2021. The preferred stock is convertible into 39000 shares of common stock. During 2021, Sheridan paid dividends of $0.56 per share on the common stock and $1.80 per share on the preferred stock. Each $1,000 bond is convertible into 45 shares of common stock. The net income for 2021 was $366000 and the income tax rate was 25%....
Murray Company reports net income of $893,000 for the year. It has no preferred stock, and...
Murray Company reports net income of $893,000 for the year. It has no preferred stock, and its weighted-average common shares outstanding is 380,000 shares.    Compute its basic earnings per share. Murray Company reports net income of $893,000 for the year. It has no preferred stock, and its weighted-average common shares outstanding is 380,000 shares.    Compute its basic earnings per share. Basic Earnings Per Share Choose Numerator: / Choose Denominator: = Basic EPS – / = Basic EPS –...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT