If a parent company has controlling interest in a subsidiary which has no potentially dilutive securities outstanding, then in the calculation of consolidated diluted EPS, it will be necessary to
A. only make an adjustment of subsidiary’s basic earnings.
B. replace the parent’s equity in subsidiary earnings with the parent’s equity in subsidiary’s diluted EPS.
C. make a replacement calculation in the parent’s basic earnings for the EPS.
D. only use the parent’s common shares and shares represented by the parent’s potentially dilutive securities.
Answer:D
If a parent company has controlling interest in a subsidiary which has no potentially dilutive securities outstanding, then in the calculation of consolidated diluted EPS, it will be necessary to
A. only make an adjustment of subsidiary’s basic earnings. B. replace the parent’s equity in subsidiary earnings with the parent’s equity in subsidiary’s diluted EPS. C. make a replacement calculation in the parent’s basic earnings for the EPS. D. only use the parent’s common shares and shares represented by the parent’s potentially dilutive securities.