Jeff Corporation owns 90% of the common stock of Subsidiary Jordan. The following data is available:
The preferred stock is cumulative and convertible. The annual preferred dividends are $20,000.
Required:
1. Jordan's preferred stock is convertible into 20,000 shares of Jordan's common stock. Jeff and Jordan do not have any other potentially dilutive securities outstanding.
a. What is Jordan's basic EPS and diluted EPS?
b. What is consolidated basic EPS and diluted EPS?
2. Jordan's preferred stock is convertible into 20,000 shares of Jeff's common stock. Jeff and Jordan do not have any other potentially dilutive securities outstanding. What is consolidated basic EPS and diluted EPS?

Question

Jeff Corporation owns 90% of the common stock of Subsidiary Jordan. The following data is available:
  The preferred stock is cumulative and convertible. The annual preferred dividends are $20,000.
Required:
1. Jordan's preferred stock is convertible into 20,000 shares of Jordan's common stock. Jeff and Jordan do not have any other potentially dilutive securities outstanding.
a. What is Jordan's basic EPS and diluted EPS?
b. What is consolidated basic EPS and diluted EPS?
2. Jordan's preferred stock is convertible into 20,000 shares of Jeff's common stock. Jeff and Jordan do not have any other potentially dilutive securities outstanding. What is consolidated basic EPS and diluted EPS?

Quizplus · Accepted Answer

The Answer of Jeff Corporation owns 90% of the common stock of Subsidiary Jordan. The following data is available:
  The preferred stock is cumulative and convertible. The annual preferred dividends are $20,000.
Required:
1. Jordan's preferred stock is convertible into 20,000 shares of Jordan's common stock. Jeff and Jordan do not have any other potentially dilutive securities outstanding.
a. What is Jordan's basic EPS and diluted EPS?
b. What is consolidated basic EPS and diluted EPS?
2. Jordan's preferred stock is convertible into 20,000 shares of Jeff's common stock. Jeff and Jordan do not have any other potentially dilutive securities outstanding. What is consolidated basic EPS and diluted EPS?

Jeff Corporation Owns 90% of the Common Stock of Subsidiary