How Would Consolidated Earnings Per Share Be Calculated If the Subsidiary

question 101

Multiple Choice

How would consolidated earnings per share be calculated if the subsidiary has no convertible securities or warrants?

• A) Parent's earnings per share plus subsidiary's earnings per share.
• B) Parent's net income divided by parent's number of shares outstanding.
• C) Consolidated net income divided by parent's number of shares outstanding.
• D) Average of parent's earnings per share and subsidiary's earnings per share.
• E) Consolidated income divided by total number of shares outstanding for the parent and subsidiary.

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Definitions:

Cash Discount

A reduction in price offered to a buyer for paying their invoice before a specified date.

Reduction

The process of decreasing the amount, size, or intensity of something.

Invoices

Official documents issued by a seller to a buyer, detailing the products or services sold, their prices, and the total amount owed.

Trade Discount

A reduction in the list price granted by wholesalers or manufacturers to retailers or other buyers in the same trade to encourage bulk purchasing.