Primus, Inc., owns all outstanding stock of Sonston, Inc. Forthe current year, Primus reports...

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Primus, Inc., owns all outstanding stock of Sonston, Inc. Forthe current year, Primus reports net income (exclusive of anyinvestment income) of $608,000. Primus has 50,000 shares of commonstock outstanding. Sonston reports net income of $208,000 for theperiod with 40,000 shares of common stock outstanding. Sonston alsohas 5,000 stock warrants outstanding that allow the holder toacquire shares at $7.50 per share. The value of this stock was $15per share throughout the year. Primus owns 1,200 of thesewarrants.
What amount should Primus report for diluted earnings pershare?

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Ans Diluted earnings per share Particulars Amount Net income from Primus 608000 Add Income from sonston 199680 Earnings applicable to diliuted 807680 Outstanding common shares 50000 Diluted EPS 80768050000 See Answer

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In: AccountingPrimus, Inc., owns all outstanding stock of Sonston, Inc. Forthe current year, Primus reports net...Primus, Inc., owns all outstanding stock of Sonston, Inc. Forthe current year, Primus reports net income (exclusive of anyinvestment income) of $608,000. Primus has 50,000 shares of commonstock outstanding. Sonston reports net income of $208,000 for theperiod with 40,000 shares of common stock outstanding. Sonston alsohas 5,000 stock warrants outstanding that allow the holder toacquire shares at $7.50 per share. The value of this stock was $15per share throughout the year. Primus owns 1,200 of thesewarrants.What amount should Primus report for diluted earnings pershare?