Exam 9: Long-Lived Assets

You calculate basic EPS to be $15.87 and diluted EPS to be $11.65.From a disclosure point,what needs to be disclosed?

On January 1,2012,KER had 25,000 common shares issued and outstanding.On July 1,KER sold 5,000 shares.The net income for the year was $800,000.Calculate the basic earnings per share.

EPS figures must be disclosed under both ASPE and IFRS.

The balance sheet at the beginning of the current year for GHI Inc.reflected the following: No transactions affecting the denominator of EPS occurred during the year.Assume the preferred shares are dilutive.The number of potential common shares to be included in the denominator of fully diluted EPS is:

At December 31,2013,HIJ had 2,000 common shares outstanding.On January 1,2014,HIJ issued 1,000 convertible preferred (one share of common for one share of preferred)shares.During 2014,HIJ declared and paid $4,000 cash dividends on the common and $4,000 cash dividends on the preferred (the annual requirement).Net income for the year ended December 31,2014,was $36,000.Assuming an income tax rate of 50 percent,what should be diluted earnings per share for the year ended December 31,2014?

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

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?

An anti-dilutive effect means that EPS is decreased as a result.

Corporations with simple capital structures are required to present two sets of EPS data.

Earnings for a firm for the current year are $20,000 and the weighted average number of common shares before considering potentially dilutive securities is 18,000.The firm has no preferred shares but has 100,8%,$1,000 convertible bonds which were issued at face value many years ago.Each bond is convertible into 50 common shares.The tax rate is 40%.Compute EPS to be reported for this firm.(Rounded to the nearest cent)

A company with a simple capital structure would include which of the following in the computation of earnings per share?

Earnings per share refer to the amount of earnings attributable to each share of common and preferred stock.

At December 31,2013,GHI had 400 common shares outstanding.On October 1,2014,an additional 100 common shares were issued.In addition,GHI had $40,000 of 8 percent,convertible bonds outstanding at December 31,2013,which are convertible into 225 common shares.No bonds were converted into common shares in 2014.Net income for the year ended December 31,2014,was $14,000.Assuming the income tax rate was 50 percent,the basic earnings per share for the year ended December 31,2014,should be: (Rounded to the nearest cent)

When a midyear stock dividend increases the number of common shares outstanding for the period,the average number of common shares outstanding is computed as if the stock dividend was distributed at the beginning of the year.

In computing the weighted average number of shares outstanding,the following is considered outstanding only as of the date issued or sold:

On January 1,2014,WXY had stock warrants outstanding to purchase 6,000 shares at an option price of $10.The common shares' market price was $15 the entire year.The firm has 200,000 common shares outstanding at the end of the year.The effect of the warrants on EPS is to:

In some cases,diluted earnings per share amounts may be the same as the basic earnings per share amounts.

For purposes of computing the weighted average number of shares outstanding during the year,a midyear event that must be treated as occurring at the beginning of the year is the purchase of treasury stock.

A firm has 10,000 common shares outstanding on January 1 of the current year.The following events take place during the current year: May 1 issued 3,000 new common shares June 30 purchased 4,000 shares for the treasury October 31 distributed a 20% stock dividend December 1 reissued the June 30 treasury stock What is the weighted-average number of shares to be used for computing EPS? (Do not round intermediate calculations.Round your final answer to nearest whole number.)

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 basic earnings per share for 2014,is (rounded to the nearest cent):