What is the diluted earnings per share


Flyer Corporation holds 90 % of Kite Company's common shares but none of its preferred shares. On the date of acquisition, the fair value of the noncontrolling interest was equal to 10 % of the book value of Kite Company. Summary balance sheets for the companies on December 31, 2008, are as follows:

Flyer's preferred pays an 8 % annual dividend, and Kite's preferred pays a 10 % dividend. Kite's preferred shares can be converted into 20,000 shares of common stock at any time. Kite reported net income of $35,000 and paid a total of $10,000 of dividends in 2008. Flyer reported income from its separate operations of $80,000 and paid total dividends of $25,000 in 2008.

Based on the information provided, what is the diluted earnings per share for the consolidated entity for 2008?

 

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Accounting Basics: What is the diluted earnings per share
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