Exam 17: Earnings Per Share and Retained Earnings

The assumed conversion of convertible debt and preferred stock in diluted earnings per share calculations affects

On January 1, 2010, Brennen Corporation had 20, 000 shares of common shares outstanding.During the year, it sold another 2, 600 shares on July 1 and reacquired 600 shares on November 1.The corporation earned $337, 600 net income.The company also has 15, 000 shares of $10 par value, 6%, cumulative preferred stock on which no dividends have been declared for the last two years.The basic earnings per share for the year is

Under the if-converted method, the impact of various convertible securities on the diluted earnings per share calculation are ranked from

During 2010, Pesty Co.had net income of $200, 000 including after-tax interest expense of $30, 000 on convertible bonds.The $300, 000 face value of convertible bonds can be converted into common stock at the rate of 300 shares per $1, 000 bond.Prior to the conversion, there were 400, 000 shares of common stock outstanding.The fully diluted earnings per share is

On January 1, 2010, Libby Corporation had 18, 000 shares of common stock outstanding, and reacquired 2, 000 shares on July 1.The company earned net income of $110, 800 and paid a cash dividend on its preferred stock of $36, 000.The earnings per share for the year was

Interest expense on convertible bonds that are dilutive is included in the numerator of the diluted earnings per share calculation at an amount equal to

The Logan Company does not carry fire insurance for any of its factories.Instead, the company appropriates retained earnings each year for an amount equal to the estimated annual insurance premiums.During the current year, one of its factories is destroyed by fire.Logan should debit which one of the following accounts to record the destruction

How will a company's working capital 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.) Working Capital Total Stockholders Equity I. decrease decrease II. decrease no effect III. no effect no effect III. no effect decrease

When a corporation has contingently issuable common stock for which the conditions have not been met for issuance, the shares are included in

When computing diluted earnings per share, a company may use the if converted method or the treasury stock method. Required: Describe when and why a company would use each method.

On January 1, a corporation had 10, 380 shares of common stock outstanding.On August 1, it sold an additional 6, 000 shares.During the year, dividends of $4, 800 and $56, 000 were declared and paid on the common and preferred stock, respectively.Net income for the year was $240, 000.The basic earnings per share for the year was

Which one of the following would least likely result in a negative component of stockholders' equity?

In the determination of the diluted earnings per share, convertible securities are

Which one of the following indicators is intended to show the potential impacts of possible future events on a corporation's performance?

Basic earnings per share is computed as

Dual presentation of the basic and diluted earnings per share amounts is

On January 1, a corporation had 20, 000 shares of common stock outstanding.An additional 4, 000 shares were issued on July 1, and on November 1, the company declared a 3-for-1 stock split.The denominator in the earnings per share calculation would be

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

During 2010, Omni Corp.had net income of $300, 000.Included in net income was after-tax interest expense of $20, 000 on convertible bonds.The $200, 000 face value of convertible bonds can be converted into common stock at the rate of 200 shares per $1, 000 bond.Prior to the conversion, there were 400, 000 shares of common stock outstanding.The fully diluted earnings per share is

Specific EPS disclosure is regularly reported for extraordinary items under IFRS GAAP I. yes no II. no yes III. yes yes IV no no