Exam 18: Earnings Per Share

A company earned $20,000 in 2014 and had 20,000 shares of common stock outstanding the entire year.The following four potentially dilutive securities were also outstanding for the entire year.The numerator and denominator effects of the issues are as indicated: What is diluted EPS?

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

Moodrocker Company had 1,000 common shares issued and outstanding at January 1.During the year,Moodrocker also had the common stock transactions listed below. Given this information,what is the weighted-average number of shares that Moodrocker should use for earnings per share purposes?

2,000 employee stock options to purchase on share of common stock Each at $5.The average market price of the common stock For the year was $20. What is the correct ordering (ranking)of the dilutive issues for determining their inclusion into diluted earnings per share?

The following information applies to the next three questions: Tangier Corporation currently has stock rights outstanding for 2,000 common shares. The exercise price of these shares is $25. The options were issued in January of 2012. The average market price of the related common stock during the year 2012 was $30. The average market price of the related common stock during 2013 was $26 and during 2014 was $21. The company's fiscal year ends on December 31 of each year. -How should these stock rights be treated in earnings per share calculations for the year ending December 31,2012?

The following information relates to the Tykex Company for 2014: Net income,$50,000 Common stock,shares outstanding on January 1: 30,000 June 30,2014,issued 2,000 shares of 8% cumulative convertible preferred Stock,$100 par value,each share convertible into 10 shares Of common stock. September 30,2014,issued a 40% stock dividend. What is diluted earnings per share?

In computing the earnings per share of common stock,noncumulative preferred dividends not declared should be

At December 31,2013,Grandin Corporation had 500 shares of common stock outstanding.On October 1,2014,an additional 200 shares of common stock were issued.In addition,Grandin Corp.had $40,000 of 8 percent convertible bonds outstanding at December 31,2013,which are convertible into 225 shares of common stock.No bonds were converted into common stock in 2014.Net income for the year ending December 31,2014,was $14,000.Assuming the income tax rate was 50 percent,the diluted earnings per share for the year ended December 31,2014,should be

At December 31,2014,the Carboneer Company had 150,000 shares of common stock issued and outstanding.On April 1,2015,an additional 30,000 shares of common stock were issued.Carboneer's net income for the year ended December 31,2015,was $517,500.During 2015,Carboneer declared and paid $300,000 in cash dividends on its nonconvertible preferred stock.The basic earnings per common share,rounded to the nearest penny,for the year ended December 31,2015,should be

What would be the effect on book value per share and earnings per share if a corporation purchased its own shares in the open market at a price greater than the book value per share?

The if-converted method of computing EPS data assumes conversion of convertible securities at the

In calculating diluted earnings per share,which of the following should not be considered?

The following is a partial balance sheet for Adherance Corp.for the year ended December 31,2013: (a)Each $1,000 convertible bond can be converted into 80 shares of common stock. (b)On September 1,2014,one-third of the convertible debt was converted into common stock. (c)Adherance reported net income of $1,550,000 in 2014.The income tax rate was 30 percent. (d)No other stock transactions took place during 2014. (1)Compute basic earnings per share for 2014. (2)Compute diluted earnings per share for 2014.

In determining earnings per share,interest expense,net of applicable income taxes,on convertible debt which is dilutive should be

On December 31,2013,Freulein Company had 8,000 shares of common stock issued and outstanding.On April 1,2014,an additional 1,500 shares of common stock were issued and on July 1,500 more shares were issued.On October 1,2014,Freulein issued 10,$1,000 maturity value,8% convertible bonds.Each bond is convertible into 40 shares of common stock.No bonds were converted into common stock in 2014.Assuming there are no antidilutive securities,what is the number of shares Freulein should use to compute diluted earnings per share for the year ended December 31,2014?

Digistore,Inc.,had 400,000 shares of $20 par common stock and 40,000 shares of $100 par,6% cumulative,convertible preferred stock outstanding for the entire year ended December 31,2014.Each share of the preferred stock is convertible into 5 shares of common stock.Digistore's net income for 2014 was $1,680,000.For the year ended December 31,2014,the diluted earnings per share is

When using the if-converted method to compute diluted earnings per share,convertible securities should be

At December 31,2013,Joplin Company had 350 shares of common stock outstanding.On October 1,2014,an additional 150 shares of common stock were issued.In addition,Joplin had $40,000 of 8 percent convertible bonds outstanding at December 31,2014,which are convertible in 225 shares of common stock.No bonds were converted into common stock in 2014.Net income for the year ended December 31,2014,was $14,000.Assuming an income tax rate of 50%,the basic earnings per share for the year ended December 31,2014,would be

At December 31,2014 and 2013,Rollins Corp.had 200,000 shares of common stock and 20,000 shares of 5 percent,$100 par value cumulative preferred stock outstanding.No dividends were declared on either the preferred or common stock in 2013 or 2014.Net income for 2014 was $1,000,000.For 2014,basic earnings per common share amounted to

An entity that reports a discontinued operation or an extraordinary item shall present basic and diluted earnings per share amounts for those line items