Question 1

All other things equal,what is the effect on earnings per share when a corporation acquires shares of its own stock on the open market?

Accepted Answer

A) Decrease. 
B) No effect if the shares are held as treasury shares. 
C) Increase only if the shares are considered to be retired. 
D) Increase. 
A) Decrease. 
B) No effect if the shares are held as treasury shares. 
C) Increase only if the shares are considered to be retired. 
D) Increase.

Question 2

Dublin Inc.had the following common stock record during the current calendar year:
 
A 10% stock dividend was paid on December 1.What is the number of shares to be used in computing basic EPS?

Accepted Answer

A) 2,075,000. 
B) 2,282,500. 
C) 2,475,000. 
D) 2,620,000. 
A) 2,075,000. 
B) 2,282,500. 
C) 2,475,000. 
D) 2,620,000.

Question 3

In order to encourage employee ownership of the company's $1 par common shares,T Corp.permits any of its employees to buy shares directly from the company through payroll deduction.There are no brokerage fees and shares can be purchased at a 15% discount.During June,employees purchased 150,000 shares at a time when the market price of the shares on the New York Stock Exchange was $10 per share.
Required:
Prepare the appropriate journal entry to record the June purchases of shares under the employee share purchase plan.

Accepted Answer

The answer of In order to encourage employee ownership of...

Question 4

The following information pertains to J Company's outstanding stock for 2016:  
What is the number of shares J should use to calculate 2016 basic earnings per share?

Accepted Answer

A) 20,000. 
B) 22,500. 
C) 25,000. 
D) 27,000. 
A) 20,000. 
B) 22,500. 
C) 25,000. 
D) 27,000.

Question 5

Hammerstein Corporation offers a variety of share-based compensation plans to employees.Under its restricted stock award plan,the company,on January 1,2016,granted 2 million of its $1 par common shares to various division managers.The shares are subject to forfeiture if employment is terminated within four years.The common shares have a market price of $20 per share on the award date.
Required:
(1. )Determine the total compensation cost from these restricted shares.
(2. )Prepare the appropriate journal entry to record the award on January 1,2016.
(3. )Prepare the appropriate journal entry to record compensation expense on December 31,2016.
(4. )Suppose a 15% forfeiture rate was expected prior to vesting.Determine the total compensation cost,assuming the company follows the fair value approach and chooses to anticipate forfeitures at the grant date.

Accepted Answer

The answer of Hammerstein Corporation offers a variety of share-based...

Question 6

Which is the correct entry to record compensation expense for the year 2016?

Accepted Answer

The answer of Which is the correct entry to record...

Question 7

Nonconvertible bonds affect the calculation of:

Accepted Answer

A) Basic earnings per share. 
B) Diluted earnings per share. 
C) Both A and B. 
D) None of these answer choices is correct. 
A) Basic earnings per share. 
B) Diluted earnings per share. 
C) Both A and B. 
D) None of these answer choices is correct.

Question 8

Stock options,rights,and warrants are different from convertible securities in that they:

Accepted Answer

A) Typically increase cash upon exercise. 
B) Usually reduce total assets upon exercise. 
C) Often reduce liabilities upon exercise. 
D) Normally increase retained earnings upon exercise. 
A) Typically increase cash upon exercise. 
B) Usually reduce total assets upon exercise. 
C) Often reduce liabilities upon exercise. 
D) Normally increase retained earnings upon exercise.

Question 9

What is Falwell's diluted earnings per share for 2016,rounded to the nearest cent?

Accepted Answer

A) $3.14. 
B) $4.90. 
C) $4.34. 
D) Cannot determine from the given information. 
A) $3.14. 
B) $4.90. 
C) $4.34. 
D) Cannot determine from the given information.

Question 10

When we take into account the dilutive effect of stock options,rights,and warrants in the calculation of EPS,the method used is called the:

Accepted Answer

A) Optional method. 
B) If converted method. 
C) Dilution method. 
D) Treasury stock method. 
A) Optional method. 
B) If converted method. 
C) Dilution method. 
D) Treasury stock method.

Question 11

Compensation expense must be adjusted during the service period to reflect changes in the fair value of options caused by changes in the market price of the underlying shares.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following results in increasing basic earnings per share?

Accepted Answer

A) Paying more than book (carrying)value to retire outstanding bonds. 
B) Issuing cumulative preferred stock. 
C) Purchasing treasury stock. 
D) All of these answer choices increase basic earnings per share. 
A) Paying more than book (carrying)value to retire outstanding bonds. 
B) Issuing cumulative preferred stock. 
C) Purchasing treasury stock. 
D) All of these answer choices increase basic earnings per share.

Question 13

A simple capital structure might include:

Accepted Answer

A) Stock rights. 
B) Convertible bonds. 
C) Nonconvertible preferred stock. 
D) Stock purchase warrants. 
A) Stock rights. 
B) Convertible bonds. 
C) Nonconvertible preferred stock. 
D) Stock purchase warrants.

Question 14

The reporting of earnings per share is required only for:

Accepted Answer

A) Private companies. 
B) Companies with complex capital structures. 
C) Publicly traded corporations. 
D) Medium-sized and large corporations. 
A) Private companies. 
B) Companies with complex capital structures. 
C) Publicly traded corporations. 
D) Medium-sized and large corporations.

Question 15

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Accepted Answer

The answer of Listed below are five terms followed by...

Question 16

Which of the following does not represent potential shares?

Accepted Answer

A) Convertible preferred stock. 
B) Convertible bonds. 
C) Stock rights. 
D) Participating preferred stock. 
A) Convertible preferred stock. 
B) Convertible bonds. 
C) Stock rights. 
D) Participating preferred stock.

Question 17

When the income statement includes discontinued operations,which amounts require per share presentation?

Accepted Answer

EPS data (basic and diluted)must be pres

Question 18

The single accounting number in the annual report that receives the most attention by investors is:

Accepted Answer

A) Total revenue. 
B) Book value per share. 
C) Equity per share. 
D) Earnings per share. 
A) Total revenue. 
B) Book value per share. 
C) Equity per share. 
D) Earnings per share.

Question 19

Parsley Corporation had 250,000 shares of common stock and 5,000 shares of 8%,$100 par,preferred stock outstanding on December 31,2015.The preferred stock is cumulative,nonconvertible preferred stock.On June 1,2016,Parsley sold 36,000 shares of common stock for cash.No cash dividends were declared for 2016.Parsley reported a net loss of $320,000 for the year ended December 31,2013.
Required:
Calculate Parsley's loss per share (rounded to 2 decimal places)for the year ended December 31,2016.

Accepted Answer

[$-320,000 - (8% x $

Question 20

Under its executive stock option plan,W Corporation granted options on January 1,2016,that permit executives to purchase 15 million of the company's $1 par common shares within the next eight years,but not before December 31,2018 (the vesting date).The exercise price is the market price of the shares on the date of grant,$18 per share.The fair value of the options,estimated by an appropriate option pricing model,is $4 per option.No forfeitures are anticipated.The options are exercised on April 2,2019,when the market price is $21 per share.By what amount will W's shareholder's equity be increased when the options are exercised?

Accepted Answer

A) $ 60 million. 
B) $270 million. 
C) $315 million. 
D) $330 million. 
A) $ 60 million. 
B) $270 million. 
C) $315 million. 
D) $330 million.

All other things equal,what is the effect on earnings per share when a corporation acquires shares of its own stock on the open market?

Dublin Inc.had the following common stock record during the current calendar year: A 10% stock dividend was paid on December 1.What is the number of shares to be used in computing basic EPS?

The following information pertains to J Company's outstanding stock for 2016: What is the number of shares J should use to calculate 2016 basic earnings per share?

Which is the correct entry to record compensation expense for the year 2016?

Nonconvertible bonds affect the calculation of:

Stock options,rights,and warrants are different from convertible securities in that they:

What is Falwell's diluted earnings per share for 2016,rounded to the nearest cent?

When we take into account the dilutive effect of stock options,rights,and warrants in the calculation of EPS,the method used is called the:

Compensation expense must be adjusted during the service period to reflect changes in the fair value of options caused by changes in the market price of the underlying shares.

Which of the following results in increasing basic earnings per share?

A simple capital structure might include:

The reporting of earnings per share is required only for:

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Which of the following does not represent potential shares?

When the income statement includes discontinued operations,which amounts require per share presentation?

The single accounting number in the annual report that receives the most attention by investors is:

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, comprehensive Income, and the Statement of Cash Flows

Income Measurement

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity

Accounting Changes

The Statement of Cash Flows

Filters

Exam 19: Share-Based Compensation and Earnings Per Share

All other things equal,what is the effect on earnings per share when a corporation acquires shares of its own stock on the open market?

Dublin Inc.had the following common stock record during the current calendar year: A 10% stock dividend was paid on December 1.What is the number of shares to be used in computing basic EPS?

The following information pertains to J Company's outstanding stock for 2016: What is the number of shares J should use to calculate 2016 basic earnings per share?

Which is the correct entry to record compensation expense for the year 2016?

Nonconvertible bonds affect the calculation of:

Stock options,rights,and warrants are different from convertible securities in that they:

What is Falwell's diluted earnings per share for 2016,rounded to the nearest cent?

When we take into account the dilutive effect of stock options,rights,and warrants in the calculation of EPS,the method used is called the:

Compensation expense must be adjusted during the service period to reflect changes in the fair value of options caused by changes in the market price of the underlying shares.

Which of the following results in increasing basic earnings per share?

A simple capital structure might include:

The reporting of earnings per share is required only for:

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms.Match each phrase with the number for the most correct term.

Which of the following does not represent potential shares?

When the income statement includes discontinued operations,which amounts require per share presentation?

The single accounting number in the annual report that receives the most attention by investors is:

Environment and Theoretical Structure of Financial Accounting

Review of the Accounting Process

The Balance Sheet and Financial Disclosures

The Income Statement, comprehensive Income, and the Statement of Cash Flows

Income Measurement

Time Value of Money Concepts

Cash and Receivables

Inventories: Measurement

Inventories: Additional Issues

Property, plant, and Equipment and Intangible Assets: Acquisition and Disposition

Property, plant, and Equipment and Intangible Assets: Utilization and Impairment

Investments

Current Liabilities and Contingencies

Bonds and Long-Term Notes

Leases

Accounting for Income Taxes

Pensions and Other Postretirement Benefits

Shareholders Equity

Accounting Changes

The Statement of Cash Flows

Filters