ACT506_CTAssignment_Mod02_Option02-1.xlsx

ACT506_CTAssignment_Mod02_Option02-1.xlsx - ACT506 Module 2...

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ACT506 Module 2 Critical Thinking Assignment Option #2 Part 1 Consolidated Earnings Per Share Facts to the situation: Push Corporation is the parent. 20x7 Financial information: Summer Corp is the subsidiary. Summer Corp has income before taxes 100,000 Push Corporation has 100% control of Summer Corp stock. Allocated Taxes at 40% 40,000 Both Push Corporation and Summer Corp have 40% tax rate. N.I.A.T. 60,000 Push Corporation has 400,000 shares at $10.00 par value common stock and 30,000 shares of $5.00 par 6% convertible preferred stock. The preferred stock is convertible into 20x7 Financial information: Consolidated Net Income 20,000 Push Corporation 1,000,000 of Parent's common stock. Summer Corp income before taxes 100,000 Consolidate Net Income 1,100,000 Income Tax at 40% 440,000
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Consolidated Net Income after taxes 660,000
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Part 2 Calculation of Basic and Diluted E.P.S. for Summer Corp. (Subsidiary) Information for Calculation: Summer Corp has 200,000 shares at $5.00 par common stock and $150,000 of 6% preferred convertible bonds outstanding. The bonds, issued at par, are convertible into 40,000 common shares of Summer Corp, subsidiary.
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