Knight Company owned 80% of the common stock of Stoop Company. Stoop had 50,000 shares of $5 par value common stock and 2,000 sharesof preferred stock outstanding. Each preferred share received an annual per share dividend of $2 and is convertible into four shares of commonstock. Knight did not own any of Stoop's preferred stock. Stoop also had 600 bonds outstanding, each of which is convertible into ten shares ofcommon stock. Stoop's annual after-tax interest expense for the bonds was $2,000. Knight did not own any of Stoop's bonds. There are no excessamortizations or intra-entity transactions associated with this consolidation. Stoop reported net income of $300,000 for 2024. Knight has 100,000shares of common stock outstanding and reported net income of $400,000 for 2024.What would Knight report as consolidated basic earnings per share?Note: Round your answer to two decimal places.Multiple ChoiceO $5.68$6.37OMSaved< Prev3119 of 20Messages14Next >12+Sep 165:02 O$5.68$6.37$6.00$6.40$7.00< PrevSaved15 of 20wwwNext >

Basic earning per share :- Basic earnings per share is the amount of a company's profit that can be…

Answered: What would Knight report as…

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What would Knight report as consolidated basic earnings per share? Note: Round your answer to two decimal places. S

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Knight Co. owned 80% of the common stock of Stoop Co. Stoop had 50,000 shares of $5 par value common stock and 2,000 shares of preferred stock outstanding. Each preferred share received an annual per share dividend of $10 and is convertible into four shares of common stock. Knight did not own any of Stoop's preferred stock. Stoop also had 600 bonds outstanding, each of which is convertible into ten shares of common stock. Stoop's annual after-tax interest expense for the bonds was $22,000. Knight did not own any of Stoop's bonds. Stoop reported income of $300,000 for 2017. Stoop's diluted earnings per share (rounded) is calculated to be Please don't provide answer in image format thank you
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