Questions:

1. Calculate Korver's diluted EPS

2. Calculate Thompson's basic consolidated EPS

3. Calculate Thompson's diluted consolidated EPS

**Please show complete solution

Thompson Group owns 85% of Korver Co. common stock and 21% of Korver's preferred stock. Thompson uses the initial value method to account for the Korver investment. In 2019 Thompson had net income of $1779757 on its non- consolidated income statement, and Korver reported $691033 in net income and paid $81942 in preferred share dividends and $209459 in common share dividends. Both companies face a tax rate of 20%. Thompson has 524032 shares of stock outstanding while Korver has 101999 shares. Korver's preferred shares can be converted into 48099 common shares