Exam 20: Earnings Per Share

On January 1, 2012 JMR had 30,000 common shares issued and outstanding.On July 1, JMR sold 500 shares.The net income for the year was $100,000.Calculate the basic earnings per share.

The annual dividend on nonconvertible cumulative preferred shares is $10,000.At the beginning of the current year, there were 3 years of dividends in arrears.During the current year, $38,000 of dividends on the preferred shares was declared, and $35,000 were paid.What amount of dividends on preferred shares will be subtracted from earnings when computing basic EPS for the current year?

Transactions that take place in the period between the end of the fiscal year and the financials statement released must be disclosed and described when which of the following happens:

The following information relates to the SPE company in 2014. Net income: $50,000 Common shares outstanding on January 1: 30,000 On June 30 issued 2,000 8% cumulative convertible preferred shares $100 par, each convertible into 10 common shares Issued a 40% stock dividend on Sept.30 What is the diluted EPS? (Rounded to the nearest cent)

Given the following information, EPS is, $ ________

ABC paid $5,000 in dividends to its preferred shareholders.The 5 percent preferred shares (10,000 shares outstanding)are nonconvertible and noncumulative.The $5,000 dividend:

At December 31, 2013, BCD had 700 common shares outstanding.On September 1, 2014, an additional 300 common shares were issued.In addition, BCD had $20,000 of 8 percent convertible bonds outstanding December 31, 2013, which are convertible into 400 common shares.No bonds were converted into common shares in 2014.Net income for the year ended December 31, 2014, was $6,000.Assuming the income tax rate was 50 percent, what should be the diluted earnings per share for the year ended December 31, 2014?

Where there are significant changes in a corporation's capital structure after year end but before the financial statement date, the transaction must be disclosed and described.

Selected accounting data for JCB for 2014 were: (a)Common shares, outstanding shares on January 1, 2014, 80,000. (b)Preferred shares, $.24, nonconvertible; cumulative; outstanding 5,000 shares. (c)Preferred shares, $.15, cumulative; convertible-one share of preferred for two shares of common; outstanding 1,500 shares. (d)Stock options outstanding for 4,000 common shares; option price $20; (e)Bonds payable, 6%; each $1,000 bond is convertible to 50 common shares, par value outstanding $40,000. (f)Net income was $202,400 average income tax rate, 40%. (g)Company earns interest at 5%. Required: Determine basic and diluted EPS.

RST's net income for the year ended December 31, 2014, was $30,000.During 2014, RST declared and paid $3,000 cash dividends on preferred shares (the full year's requirement)and $5,250 cash dividends on common shares.At December 31, 2014, 36,000 common shares were issued and outstanding, 30,000 of which had been outstanding throughout the year and 6,000 of which were issued on July 1, 2014.No other common share transactions were completed during the year, and there is no potential dilution of earnings per share.The 2014 earnings per common share of RST, rounded to the nearest cent, should be:

Which of the following choices best describes the location of the required basic and diluted EPS disclosures for public companies?

ABC Inc.has 20,000 common shares outstanding throughout the year.It also had 20,000, 6 percent preferred shares, par $20, (cumulative and nonconvertible)outstanding throughout the year.Net income was $300,000.The earnings per share amount would be $13.80

On January 2, 2014, CBA issued at par $10,000 of 8 percent bonds convertible into 2,000 of CBA's common shares.No bonds were converted during 2014.Throughout 2014, CBA had 2,000 common shares outstanding.CBA's net income after tax was $1,000.CBA's income tax rate is 50 percent.No potentially dilutive securities other than the convertible bonds were outstanding during 2014.CBA's basic EPS and diluted EPS for 2014 would be:

If nonconvertible preferred shares are noncumulative, subtraction of the current year's dividend must be made whether preferred dividends are declared or not for the current year.

WEIGHTY Inc.started the current year with 2,000 common shares issued, but only 1,500 were outstanding at that time.The following events took place during the current year: March 30 issued 200 previously unissued shares June 1 sold 400 treasury shares December 1 purchased 100 treasury shares December 31 issued 500 previously unissued shares What is WEIGHTY's denominator of earnings per share for the current year? (Do not round intermediate calculations.Round your final answer to nearest whole number.)

Which one of the following organizations are required to disclose EPS?

LASTEPS Co.had granted 20,000 options to buy one common share at $10 per share several years ago.The company earned $200,000 this year and had 300,000 common shares outstanding the entire year.The company earns interest at 8% and has a 40% tax rate.Given only the above information, what are basic EPS and diluted EPS respectively that should be reported? (Rounded to the nearest cent)

You are given the following information about VB Ltd.: Class A preferred shares, 800 shares issued and outstanding; annual dividend rate of $100 per share, cumulative, paid at the end of each quarter; each share is convertible into 50 shares of Class B common Class B common shares, 90,000 shares issued and outstanding There are no other senior securities Net Income for 2012, the year of the conversion, is $850,000; there are no discontinued operations.All 1,000 shares of Class A are converted into 40,000 Class B shares on October 1 2012; dividends for the first three quarters of the year were fully paid.Calculate the basic EPS.

When computing diluted earnings per share, convertible securities are:

The 2014 net income of MNO was $300,000, and 100,000 of its common shares were outstanding during the entire year.In addition, outstanding options existed to purchase 10,000 common shares at $10 per share.These options were granted in 2012 and none had been exercised by December 31, 2014.MNO earned interest at 8% and had a 50% tax rate.The amount, which should be shown as MNO's diluted earnings per share for 2014, is (rounded to the nearest cent).