Jeff Corporation Owns 90% of the Common Stock of Subsidiary

question 31

Essay

Jeff Corporation owns 90% of the common stock of Subsidiary Jordan. The following data is available:
The preferred stock is cumulative and convertible. The annual preferred dividends are $20,000.
Required:
1. Jordan's preferred stock is convertible into 20,000 shares of Jordan's common stock. Jeff and Jordan do not have any other potentially dilutive securities outstanding.
a. What is Jordan's basic EPS and diluted EPS?
b. What is consolidated basic EPS and diluted EPS?
2. Jordan's preferred stock is convertible into 20,000 shares of Jeff's common stock. Jeff and Jordan do not have any other potentially dilutive securities outstanding. What is consolidated basic EPS and diluted EPS?

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Definitions:

Sexual Harassment

Sexual harassment is unwelcome or inappropriate sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature.

Equal Employment Opportunity Commission

A federal agency that enforces laws prohibiting workplace discrimination.

Bona Fide Occupational Qualification

A legitimate requirement for a particular job that allows for discrimination that is otherwise illegal when it is reasonably necessary to the normal operation of that particular business or enterprise.

Pregnancy-Based Discrimination

Unfair treatment or discrimination in the workplace based on pregnancy, childbirth, or related medical conditions, which is illegal under various laws.