Exam 16: Retained Earnings and Earnings Per Share

When reporting basic and diluted earnings per share companies are required to include a schedule or note identifying and reconciling the numerators and denominators use in their calculations. What other information be included in the schedule or note in the financial statements?

Under IFRS, a company's stockholders' equity consists of which two sections?

Other Comprehensive Income or loss might include what four items?

In calculating earnings per share, a company uses the treasury stock method when

On January 1, 2014, Bennett Corporation had 20,000 shares of common shares outstanding. During the year, it sold another 2,600 shares on July 1 and reacquired 600 shares on November 1. The corporation earned $337,600 net income. The company also has 15,000 shares of $10 par value, 6%, cumulative preferred stock on which no dividends have been declared for the last two years. The basic earnings per share for the year is

If a company makes a prior period adjustment, which of the following describes how it must be reported?

On October 1, 2014, White Company declared a property dividend payable in the form of marketable equity securities classified as "available for sale" for financial accounting purposes. The marketable equity securities will be distributed to the common stockholders on December 1, 2014. The investment in equity securities originally cost White $510,000 on August 1, 2014. The investment's fair value on various dates is as follows: The amount credited to Gain on Disposal of Investments resulting from this dividend transaction should be

Which of the following items would be included in a basic earnings per share calculation?

Daniel Company had 30,000 shares of common stock outstanding on January 1 and issued an additional 9,000 on August 1 of 2014. The company also has $100,000 of 8% convertible bonds outstanding during the year. Each $1,000 bond is convertible into 5 shares of common stock. Daniel had after-tax net income for the year of $160,000, and the tax rate was 30%. Required: Compute the appropriate earnings per share amount(s) to be reported on Daniel Company's 2014 income statement, and explain your answer.

The Chester Company has issued 10%, nonparticipating, cumulative preferred stock with a total par value of $500,000 and common stock with a total par value of $800,000. No dividends are in arrears. How much cash will be paid to the preferred stockholders and the common stockholders, respectively, if cash dividends of $131,000 are distributed?

Describe the two types of corporate capital structures.

How will a company's total current liabilities and total stockholders' equity be affected by the declaration of a stock dividend? (Assume the stock dividend is distributed at a later date.)

On January 1, Buchanan corporation had 50,000 shares of common stock outstanding. On April 1, the company declared a 20% stock dividend, and on August 1, the company had a 3-for-1 stock split. On December 1, the company issued an additional 6,000 shares. The denominator in the earnings per share calculation would be

Comprehensive income represents

The Norman Corporation's stockholders' equity accounts have the following balances as of January 1, 2014: Norman engaged in the following dividend transactions during 2014: March 1: Declared a 50% stock dividend on the common stock, distributable on April 10. The market price per share for the common stock was $35 on March 1. April 10: Distributed the stock dividend declared on March 1. June 30: Declared a 10% stock dividend on the common stock, distributable on August 5. The market price for the common stock was $38 per share on June 30. August 5: Distributed the stock dividend declared on June 30. December 1: A $.60 per share cash dividend was declared on the common stock, payable on January 20, 2015. Required: Prepare the entries to record the dividend transactions for 2014. (Do not record the cash dividend payment in 2015.)

Specific EPS disclosure is regularly reported for extraordinary items under

When calculating earnings per share, dividends declared on noncumulative preferred stock, but not paid, should be

Corporations with complex capital structures are required to report both the basic and diluted earnings per share amounts. In order to compute the diluted earnings per share, potential common shares must be considered. Required: List the sequence of steps necessary to include potential common shares in the diluted earnings per share calculation.

List 4 factors that management may consider prior to declaring a dividend.

Dual presentation of the basic and diluted earnings per share amounts is