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Below is a partial balance sheet of Homer and Bart Companies ...

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Accounting

Below is a partial balance sheet of Homer and Bart Companies
Homer owns 100% of the voting stock of Bart Company
Homer acquired Bart at book value and Homer uses initial value (cost method) and Bart does
not pay any dividends on common stock
Homer Company
Shares of common stock 100,000
unconsolidated income $900,000
Bart Company
shares of common stock 20000
6% 10 par preferred stock $20,000
net income (before any dividends) $80,000
THE PREFERRED STOCK IS NOT OWNED BY HOMER BUT AN OUTSIDE INVESTOR
REQUIRED:
A) The preferred stock is NOT convertible and is cumulative
What is eps for Homer?
B) The preferred stock is Convertible (each share of preferred stock
can be converted into 5 shares of Bart common stock
What is eps for Homer

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