Question 1

The two defined sections of stockholders' equity under IFRS are

Accepted Answer

A)  conditional capital and other equity. 
B)  earned capital and retained earnings. 
C)  contributed capital and retained earnings. 
D)  share capital and other equity. 
A)  conditional capital and other equity. 
B)  earned capital and retained earnings. 
C)  contributed capital and retained earnings. 
D)  share capital and other equity. D

Question 2

Basic earnings per share is computed as

Accepted Answer

A)  Net Income / Total Number of Common Shares Outstanding. 
B)  Net Income − Preferred Dividends) / Total Number of Common Shares Outstanding. 
C)  Net Income − Preferred Dividends) / Weighted-Average Number of Common Shares Outstanding. 
D)  Net Income / Weighted-Average Number of Common Shares Outstanding. 
A)  Net Income / Total Number of Common Shares Outstanding. 
B)  Net Income − Preferred Dividends) / Total Number of Common Shares Outstanding. 
C)  Net Income − Preferred Dividends) / Weighted-Average Number of Common Shares Outstanding. 
D)  Net Income / Weighted-Average Number of Common Shares Outstanding. C

Question 3

On January 1, 2016, Kiper Corporation had 12,000 shares of common stock outstanding. Kiper reacquired 1,000 shares on May 1, and issued another 5,000 shares on September 1. The company also has 10,000 shares of $20 par, 10%, noncumulative preferred stock outstanding on which no dividends have been declared during the last two years. The company had a $28,360 loss for the year. What is the basic earnings per share for the year?

Accepted Answer

A)  $5.03) 
B)  $2.95) 
C)  $5.26) 
D)  $2.18) 
A)  $5.03) 
B)  $2.95) 
C)  $5.26) 
D)  $2.18) D

Question 4

Robertson Company had 40,000 shares of common stock outstanding during 2016 and compensatory share 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. Robertson's after- tax net income was $88,000, and the tax rate was 40%.
Required:
Compute 2016 diluted earnings per share for Robertson Company.

Accepted Answer

Initial di

Question 5

Match between columns
                        Premises: investors listed on the stockholders' ledger will receive dividends
not enough cash to pay a dividend, a promissory note is issued
common stock outstanding and possibly nonconvertible preferred stock
It is the assumption that all convertible stocks or bonds have been converted into common stock at the beginning of the earliest reporting period
negative retained earnings
return of capital rather than a distribution of earnings
stock stops selling with dividends attached
unavailable for dividends

Accepted Answer

The Answer of deficit and restriction and date of record is...

Question 6

Graham, Inc. began 2017 with 25,000 common shares outstanding and issued a 20% stock dividend on August 1.
The company issued 6,000 shares on December 1. Graham also has 18,000 shares of 9%, $20 par, cumulative preferred stock outstanding on which no dividends have been paid during either 2016 or 2017. Net income for 2017 was $175,600.
Required:
Compute Graham, Inc.'s basic earnings per share for 2017.

Accepted Answer

The answer of Graham, Inc. began 2017 with 25,000 common...

Question 7

Which of the following could be a component of other comprehensive income loss)?

Accepted Answer

A)  realized gains or losses from sale of investments in available-for-sale securities 
B)  translation adjustments from converting the financial statements of a company's foreign operations into U.S. dollars 
C)  gains losses) on extraordinary items 
D)  warranty liability adjustments 
A)  realized gains or losses from sale of investments in available-for-sale securities 
B)  translation adjustments from converting the financial statements of a company's foreign operations into U.S. dollars 
C)  gains losses) on extraordinary items 
D)  warranty liability adjustments

Question 8

On January 1, 2016, Bennett 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. What is the basic earnings per share for the year?

Accepted Answer

A)  $15.92 
B)  $15.65 
C)  $15.50 
D)  $15.08 
A)  $15.92 
B)  $15.65 
C)  $15.50 
D)  $15.08

Question 9

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

Accepted Answer

A)  basic earnings per share. 
B)  diluted earnings per share. 
C)  both basic and diluted earnings per share calculations. 
D)  neither basic nor diluted earnings per share calculations. 
A)  basic earnings per share. 
B)  diluted earnings per share. 
C)  both basic and diluted earnings per share calculations. 
D)  neither basic nor diluted earnings per share calculations.

Question 10

Major Corporation had 50,000 shares of common stock outstanding during 2016 with the following characteristics:   
The company also has compensatory share options to purchase 5,000 shares of common stock at $40 a share during the year. The unrecognized compensation cost net of tax) related to these share options is $5 per share. Net income for the year was $60,600.
Required:
Compute the basic and diluted earnings per share for Major Corporation.

Accepted Answer

@#IMG-DLM& 
 Diluted

Question 11

Under the treasury stock method, the number of shares of common stock assumed to be reacquired is determined by using the

Accepted Answer

A)  ending market price of the stock. 
B)  average market price of the stock. 
C)  beginning market price of the stock. 
D)  par value of the stock. 
A)  ending market price of the stock. 
B)  average market price of the stock. 
C)  beginning market price of the stock. 
D)  par value of the stock.

Question 12

Which of the following items would be included in a basic earnings per share calculation?

Accepted Answer

A)  declared dividends on noncumulative preferred stock 
B)  declared dividends on cumulative preferred stock 
C)  undeclared dividends on cumulative preferred stock 
D)  all of these 
A)  declared dividends on noncumulative preferred stock 
B)  declared dividends on cumulative preferred stock 
C)  undeclared dividends on cumulative preferred stock 
D)  all of these

Question 13

A convertible security may have the appearance of being individually dilutive but in fact be antidilutive when viewed with combinations of other convertible securities.

Accepted Answer

A) True 
 B)False

Question 14

During 2016, Penny 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. What is the amount of fully diluted earnings per share?

Accepted Answer

A)  $0.500 
B)  $0.469 
C)  $0.408 
D)  not determinable because the bonds are not dilutive 
A)  $0.500 
B)  $0.469 
C)  $0.408 
D)  not determinable because the bonds are not dilutive

Question 15

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

Accepted Answer

A)  adjustment in options calculations for unrecognized compensation cost 
B)  treatment of unvested contingently issued shares 
C)  treatment of dividends in arrears for convertible preferred stock 
D)  treatment of contracts that may be settled in shares or for cash 
A)  adjustment in options calculations for unrecognized compensation cost 
B)  treatment of unvested contingently issued shares 
C)  treatment of dividends in arrears for convertible preferred stock 
D)  treatment of contracts that may be settled in shares or for cash

Question 16

The potential dilutive effect of the exercise of share options or warrants will affect which of the following when calculating diluted earnings per share?

Accepted Answer

A)  the earnings per share numerator 
B)  the earnings per share denominator 
C)  both the numerator and the denominator of earnings per share 
D)  neither the numerator nor the denominator of earnings per share 
A)  the earnings per share numerator 
B)  the earnings per share denominator 
C)  both the numerator and the denominator of earnings per share 
D)  neither the numerator nor the denominator of earnings per share

Question 17

List the 5 types of dividends.

Accepted Answer

1) Cash
2) Property

Question 18

On January 1, a corporation had 25,000 shares of common stock outstanding. An additional 10,000 shares were issued on July 1, and on November 1, the company declared a 2-for-1 stock split. What is the denominator in the earnings per share calculation?

Accepted Answer

A)  35,000 
B)  56,000 
C)  60,000 
D)  50,000 
A)  35,000 
B)  56,000 
C)  60,000 
D)  50,000

Question 19

All of the following types of dividends will result in an increase in liabilities as a result of the declaration of the dividend except a

Accepted Answer

A)  cash dividend. 
B)  property dividend. 
C)  scrip dividend. 
D)  stock dividend. 
A)  cash dividend. 
B)  property dividend. 
C)  scrip dividend. 
D)  stock dividend.

Question 20

On January 1, a corporation had 15,380 shares of common stock outstanding. On August 1, it sold an additional 5,000 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 $250,000. What was the basic earnings per share for the year
Rounded to the nearest cent)?

Accepted Answer

A)  $16.26 
B)  $14.32 
C)  $11.11 
D)  $10.83 
A)  $16.26 
B)  $14.32 
C)  $11.11 
D)  $10.83

The two defined sections of stockholders' equity under IFRS are

Basic earnings per share is computed as

Which of the following could be a component of other comprehensive income loss)?

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

Under the treasury stock method, the number of shares of common stock assumed to be reacquired is determined by using the

Which of the following items would be included in a basic earnings per share calculation?

A convertible security may have the appearance of being individually dilutive but in fact be antidilutive when viewed with combinations of other convertible securities.

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

The potential dilutive effect of the exercise of share options or warrants will affect which of the following when calculating diluted earnings per share?

List the 5 types of dividends.

On January 1, a corporation had 25,000 shares of common stock outstanding. An additional 10,000 shares were issued on July 1, and on November 1, the company declared a 2-for-1 stock split. What is the denominator in the earnings per share calculation?

All of the following types of dividends will result in an increase in liabilities as a result of the declaration of the dividend except a

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Company S Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows Time Value of Money Module

Cash and Receivables

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingent Obligations

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Long-Term Notes Payable

Contributed Capital

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Post-Retirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Understanding Time Value of Money Formulas and Concepts

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Exam 16: Retained Earnings and Earnings Per Share

The two defined sections of stockholders' equity under IFRS are

Basic earnings per share is computed as

Which of the following could be a component of other comprehensive income loss)?

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

Under the treasury stock method, the number of shares of common stock assumed to be reacquired is determined by using the

Which of the following items would be included in a basic earnings per share calculation?

A convertible security may have the appearance of being individually dilutive but in fact be antidilutive when viewed with combinations of other convertible securities.

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

The potential dilutive effect of the exercise of share options or warrants will affect which of the following when calculating diluted earnings per share?

List the 5 types of dividends.

On January 1, a corporation had 25,000 shares of common stock outstanding. An additional 10,000 shares were issued on July 1, and on November 1, the company declared a 2-for-1 stock split. What is the denominator in the earnings per share calculation?

All of the following types of dividends will result in an increase in liabilities as a result of the declaration of the dividend except a

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Company S Accounting System

The Balance Sheet and the Statement of Shareholders Equity

The Income Statement and the Statement of Cash Flows Time Value of Money Module

Cash and Receivables

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingent Obligations

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Long-Term Notes Payable

Contributed Capital

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Post-Retirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Understanding Time Value of Money Formulas and Concepts

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