Exam 17: Earnings Per Share and Retained Earnings

Comprehensive income represents

Reporting diluted earnings per share is required for which type of corporate capital structure?

Common shares outstanding are increased as a result of a stock dividend or stock split.For purposes of calculating the earnings per share, when is the stock dividend or stock split considered to have occurred?

On January 1, Roberts reported total stockholders' equity of $1, 300.During the year, $50 of dividends were declared and paid, donated land with a donor book value of $14 and a current fair value of $38 was received, additional common stock was issued for $300, and treasury stock was acquired for $22.The reported total stockholders' equity at December 31 was $1, 406.What was the reported net income or loss for the year?

Rhonda Company had 40, 000 shares of common stock outstanding during 2010 and compensatory stock options to purchase 5, 000 shares of common stock at $10 a share plus a $3 a share unrecognized compensation cost (net of tax).The average market price is $20 a share.The company also had 7% convertible preferred stock on which dividends of $9, 000 were declared.Each preferred share is convertible into 6, 000 common shares.Rhonda's after-tax net income was $88, 000, and the tax rate was 40%. Required: Compute 2010 diluted earnings per share for Rhonda Company.

Differences exist between IFRS and GAAP in the reporting of EPS.Which of the following areas is not an area of difference?

For which one of the following components is earnings per share information required to be presented on the income statement?

On January 1, a corporation had 60, 000 shares of common stock outstanding.On March 1, the company reacquired 12, 000 shares, and it declared a 10% stock dividend on October 1.The denominator in the earnings per share calculation would be

How will a company's working capital and net income be affected by the recording of a cash dividend on the declaration date? (Assume the dividend is paid on a later date.) Working Capital Net Income I. decrease decrease II. decrease no effect III. no effect no effect IV. no effect decrease

Aster Corp.has $1, 000, 000, 6%, nonconvertible bonds due in 2015 and $1, 500, 000, 3%, convertible bonds due in 2012.The basic earnings per share is $1.25 and the diluted earnings per share is $1.18.Based upon this information, Aster must disclose

Which of the following items would not be included in a basic earnings per share calculation?

Exhibit 17-1 The Zoeller Corporation's stockholders' equity accounts have the following balances as of December 31, 2010: Common stock, \ 10 par (30,000 sharesissued and outstanding) \ 300,000 Additional paid-in capital 2,000,000 Retained earnings \ 5,700,000 Total stockholder's equity \ 8,000,000 -Refer to Exhibit 17-1.On January 2, 2011, the board of directors of Zoeller declared a 30% stock dividend to be distributed on January 31, 2011.The market price per share of Zoeller's common stock was $30 on January 2 and $32 on January 31.As a result of this stock dividend, the retained earnings account should be decreased by

How will a company's retained earnings and total stockholders' equity be affected by the recording of the declaration of a stock dividend? (Assume the stock dividend is distributed at a later date.) Retained Earnings Total Stockholders Equity I. decrease decrease II. decrease no effect III. no effect no effect III. no effect decrease

In calculating earnings per share, a company uses the treasury stock method when

The Carol Company has issued 10%, fully participating, cumulative preferred stock with a total par value of $600, 000 and common stock with a total par value of $900, 000.No dividends are in arrears.How much cash will be paid to the preferred stockholders and the common stockholders, respectively, if cash dividends of $141, 000 are distributed?

How may a corporation report its types of comprehensive income?

Dave Company had 30, 000 shares of common stock outstanding on January 1 and issued an additional 9, 000 on August 1 of 2010.The company also has $100, 000 of 8% convertible bonds outstanding during the year.Each $1, 000 bond is convertible into 5 shares of common stock.Dave had after-tax net income for the year of $160, 000, and the tax rate was 30%. Required: Compute the appropriate earnings per share amount(s)to be reported on Dave Company's 2010 income statement, and explain your answer.

Eric, Inc.began 2011 with 25, 000 common shares outstanding and issued a 20% stock dividend on August 1.The company issued 6, 000 shares on December 1.Eric also has 8, 000 shares of 8%, $20 par, cumulative preferred stock outstanding on which no dividends have been paid during either 2010 or 2011.Net income for 2011 was $165, 060. Required: Compute Eric, Inc.'s basic earnings per share for 2011.

On January 1, 2010, a corporation had 10, 380 shares of common stock outstanding, and on June 1, it reacquired 6, 000 shares.Despite a net loss for the year of $180, 000, the company declared and paid cash dividends of $24, 000 and $28, 000 on common and preferred stock, respectively.The earnings per share for 2010 was

During 2010, Sanchez, Inc.had the following convertible securities outstanding: A. $\quad \$ 220,000$ of $10 \%, \$ 100$ par, convertible preferred stock. Each share is convertible into 5 shares of common stock. B. $\$ 200,000$ of $9.5 \%$ conventible bonds. Each $\$ 1,000$ bond is convertible into 45 shares of conmon stock C. $\$ 100,000$ of $8 \%$ convertible boncks. Each $\$ 1,000$ bond is convertible into 32 shares of common stock. D. $\$ 150,000$ of $11 \%, \$ 100$ par, convertible preferred stock. Each share is convertible into 5 shares of common stock. Sanchez, Inc.has an income tax rate of 40%. Required: