Using the Assignment Option 2 spreadsheet (linked at the bottom of this page), review the required information for Push (P) Corporations earnings per share (EPS) and Summer (S) Corporations EPS.

Required Information: 1). Calculate the basic and diluted EPS for Summer Corporation (subsidiary). 2). Calculate the Push Corporation (parent)s consolidated EPS.

Follow instructions from the worksheet carefully. Use formulas to enter amounts and data. Show details of your calculations and processes. Explain each journal entry or why one was omitted. Do not hard code numbers in the Excel worksheet.

Review the grading rubric to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.

Push Corporation has 400,000 shares at $10.00 par value common stock and

30,000 shares of $5.00 par 6% percent convertible preferred stock. The preferred stock is convertible into 20,000 of Parent's common stock.

20x7 Financial information:

Consolidated Net Income

Push Corporation

1,000,000

Summer Corp income before taxes

100,000

Consolidate Net Income

1,100,000

Income Tax at 40%

440,000

Consolidated Net Income after taxes

660,000

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.

Basic

Diluted

Summer Corp Net Income after taxes

xxx

xxx

Interest Impact of conversion of bonds,

net of taxes (xxx Times 0.xx) times

(1 - .xx) =

0

xxx

Income accruing to Common Shares

xxx

xxx

Weighted average shares

xxx

xxx

Additional shares from conversion

xxx

Weighted average shares and equivalents

xxx

xxx

Earnings per share:

xxx/ xxx=

xxx

xxx/ xxx=

xxx

Computation of Push Corporation Consolidated Earnings per Share
	Numerator					Basic		Diluted
		Consolidated net income to parent				xxx		xxx
		Less: Summer Corp net income				0		xxx
		Add: Parents share of Summer Corp
		Income based on separate diluted EPS
		[0.xxx	times	xxx,000]=		0		xxx
		Less: Preferred Dividend
		[xxx,000 times 0.xx%]				xxx		0
	Total					xxx		xxx
	Denominator
		Weighted average Shares outstanding				xxx		xxx
		Preferred Stock Conversion						xxx
	Total					xxx		xxx
	Earnings Per Share
	[xxx/ xxx,000] =					xxx
	[$xxx00/ xxx,000]=							xxx