Note: This practice assignment accounts for 3 extra points. No point will

Note: This practice assignment accounts for 3 extra points. No point will be given when (1) it is overdue, (2) it is only partially completed, (3) no work is provided, and/or (4) most answer/work is incorrect. Points will be deducted if part of the answer/work provided is incorrect.

Right Co. owned 80% of the common stock of Left Co. Right had 120,000 shares of $1 par value common stock outstanding and Left had 50,000 shares of $5 par value common stock outstanding. Left also had 600 convertible bonds outstanding, each of which is convertible into ten shares of common stock. The annual interest expense for the bonds was $40,000. Right did not own any of Left’s bonds. In current year, Right reported income of $450,000 and Left reported income of $300,000. The tax rate is 35%. Calculate the consolidate diluted earnings per share by completing the following questions.

What was the Right’s ownership percentage in Left after considering the dilutive securities that Left issued? Round to 4 decimal places.

Answer:

What amount of investment income from Left that Right should include in calculating consolidated diluted earnings per share? 

Answer:

What is the consolidated diluted earnings per share that Right will report? Round to 2 decimal places.

Answer: