Exam 16: Retained Earnings and Earnings Per Share

Differences exist between IFRS and GAAP in the reporting of EPS. Which of the following areas is not an area of difference?

Reporting diluted earnings per share is required for which type of corporate capital structure?

Following is the stockholders' equity section of Lewis Corporation's balance sheet on December 31, 2013. During 2014, the following transactions occurred: •2,000 shares of common stock were issued for cash at $25 per share. •750 shares of preferred stock were issued for cash at $124 per share. •400 shares of treasury stock were reissued for cash at $25 per share. •The final payments on the subscribed common stock were received, and 3,000 shares of common stock were issued. •On July 1, 2014, Lewis purchased equity securities for $50,000 and classified them as available for sale. The fair value of these securities was $60,000 on December 31, 2014. •Net income for 2014 was $228,000 and total dividends paid were $81,000. Required: Prepare in good form a statement of changes in stockholders' equity for Lewis Corporation for the year ended December 31, 2014.

The two defined sections of stockholders' equity under IFRS are

A retained earnings statement usually includes only adjustments to retained earning for net income, dividends, and restrictions of retained earnings.

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What is a restriction of retained earnings and why would it be necessary?

During 2014, Oddie Corp. had net income of $300,000. Included in net income was after-tax interest expense of $20,000 on convertible bonds. The $200,000 face value of convertible bonds can be converted into common stock at the rate of 200 shares per $1,000 bond. Prior to the conversion, there were 400,000 shares of common stock outstanding. The fully diluted earnings per share is

On November 1, 2014, the Cranberry Construction Company declared a property dividend payable in the form of bonds held for long-term investment purposes. The bonds will be distributed to the common stockholders on December 15, 2014. The bonds to be distributed to the common stockholders originally cost Cranberry $210,000. Fair value of the bonds on various dates is as follows: Which one of the following amounts should be used to record the appropriate credit to Property Dividends Payable?

The most common "potential common shares" that may be included in computing DEPS are share options, warrants, and convertible preferred stock and bonds.

The potential dilutive effect of the exercise of share options or warrants will affect which of the following when calculating diluted earnings per share?