Exam 9: Long-Lived Assets

Firm that earned $20,000 (after tax)had the following securities outstanding all year during which the tax rate was 40%: 20,000 common shares 1,000,6%,$100 par cumulative nonconvertible preferred shares 2,000,4%,$50 par cumulative preferred shares,each share convertible into 5 common shares 100,8%,$1,000 convertible bonds,each convertible into 10 common shares (bonds were issued at face) What is basic EPS? (Rounded to the nearest cent)

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 basic earnings per share for the year ended December 31,2014?

FGH had 5,000 common shares outstanding on December 31,2013.An additional 1,000 common shares were issued on April 1,2014,and 500 more on July 1,2014.On October 1,2014,FGH issued 10,$1,000 maturity value,7 percent convertible bonds.Each bond is convertible into 40 common shares.No bonds were converted into common shares in 2014.What was the number of shares that should be used to compute basic earnings per share and diluted earnings per share,respectively,for the year ended December 31,2014 (ignore anti-dilution)?

At December 31,2013,the shareholders' equity of LMN reported as outstanding: 100 common shares and 30 nonconvertible preferred shares.On July 1,2014,LMN issued a 10 percent stock dividend on its common shares and paid a cash dividend of $2.00 per share on its preferred (the full year's requirement).Income for the year ended December 31,2014 was $1,170.The 2014 EPS,rounded to the nearest cent,for LMN should be:

Last year,TUV had 40,000 $15 par,7 percent,cumulative,convertible preferred shares outstanding.The Board of Directors did not declare a dividend for the current period because all of these shares were converted to common shares on the first day of the period.What is the effect on the numerator of the EPS calculation for this year due to the preferred shares? (Tax rate is 40%).

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

When computing the weighted average number of shares outstanding,an actual conversion of convertible preferred shares is assumed to have occurred on the first day of the year,regardless of when it was converted.

Assume a company had net income of $20,000 and 8,000 common shares were outstanding the entire year.Also assume there were 2 convertible securities outstanding the entire year: What is the diluted EPS? (Rounded to the nearest cent)

You calculate basic EPS to be $15.87 and diluted EPS to be $16.65.From a disclosure point,what needs to be disclosed?

Calculate the weighted average shares for EPS purposes if a firm started the year with 100 common shares outstanding,reissued 80 treasury shares March 1,split 2 for 1 on April 1,purchased 50 shares for the treasury on July 1,issued a 40% stock dividend on November 1,and issued 120 shares under a stock option plan on December 1.

At December 31,2014,the shareholders' equity of ABC Inc.reported as outstanding: 100 common shares and 30 nonconvertible preferred shares.On July 1,2015,ABC Inc.issued a 10 percent stock dividend on its common shares and paid a cash dividend of $2.00 per share on its preferred (the full year's requirement).Income for the year ended December 31,2015 was $1,170.The 2015 EPS,rounded to the nearest cent,for ABC Inc.should be $8.58.

A firm that earned $20,000 (after tax)had the following securities outstanding all year during,which the tax rate was 40%: 20,000 common shares 1,000,6%,$100 par cumulative nonconvertible preferred shares 2,000,4%,$50 par noncumulative preferred shares,each share convertible into 5 common shares 100,8%,$1,000 convertible bonds,each bond convertible into 10 common shares (bonds were issued at face) No dividends were paid for the year. The diluted earnings per share for the year should be (rounded to the nearest cent):

Stock rights,options,and warrants determined to be dilutive when computing fully diluted earnings per share may be anti-dilutive when computing basic earnings per share.

Stock dividend and stock splits are treated as though they had been in effect for the entire period.

WXY had the following common share transactions: The weighted average number of shares outstanding for the year was: (Round your answer to nearest whole number.)

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.

Diluted earnings per share recalculate EPS as though the conversions of different instruments had taken place at the end of the year.

The diluted EPS does not have to be disclosed in the financial statements.

Bonds and preferred share adjustments are based on the if-converted method.

Dilutive convertible securities must be used in the computation of: