Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng

Exercise 25

Company P has internally generated net income of $200,000 (excludes share of subsidiary income). Company P has 100,000 shares of outstanding common stock. Subsidiary Company S has a net income of $60,000 and 40,000 shares of outstanding common stock. Company P owns 100% of the Company S shares.What is consolidated diluted EPS, if:
a. Company S has outstanding stock options for Company S shares, which cause a dilutive effect of 2,000 additional shares of Company S shares?
b. Company S has outstanding stock options for Company P shares, which cause a dilutive effect of 2,000 additional shares of Company P shares?
c. Company P has outstanding stock options for Company P shares, which cause a dilutive effect of 2,000 additional shares of Company P shares?