Homework Answers
Answer : A = Disregarded.
Basic Earning per share = ( Net profit - Dividend on Preference stock ) / Average outstanding stocks.
While calculating Basic earning per share we do not consider dividend from convertible preference stocks.
Dividend from convertible preference stocks is considered in Diluted earning per share
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In determining basic earnings per share, dividends on convertible cumulative preferred stock should be Select one:...
In determining basic earnings per share for a year, dividends in arrears on cumulative preferred stock...
In determining basic earnings per share for a year, dividends in arrears on cumulative preferred stock should be Select one: O a. added back to net income whether declared or not. ОО b. disregarded. C. deducted from net income whether declared or not. d. deducted from net income only if declared.
Chapter 19- Earnings per Share 95. A company with a simple capital structure would include which...
Chapter 19- Earnings per Share 95. A company with a simple capital structure would include which of the following in the computation of earnings per share? A) Convertible securities Number of shares of nonconvertible cumulative preferred shares C) Dividends on nonconvertible cumulative preferred shares D) Dividends on common shares B) Number Ans: C Difficulty: Medium Level of Learning: Knowledge Topic: LO2 96. DCE had 900 common shares outstanding on January 1, 20x3, issued 600 shares on May 1 and had...
In computing earnings per share for a simple capital structure, if the preferred stock is cumulative,...
In computing earnings per share for a simple capital structure, if the preferred stock is cumulative, the amount that should be deducted as an adjustment to the numerator (earnings) is the preferred dividends in arrears. annual preferred dividend times (one minus the income tax rate). preferred dividends in arrears times (one minus the income tax rate). annual preferred dividend.
(11 of 42) A company has cumulative preferred stock. When computing earnings per share, the current...
(11 of 42) A company has cumulative preferred stock. When computing earnings per share, the current year's dividends on the preferred stock should be: Deducted from earnings for the year. Deducted from common share dividends for the year. Added to earnings for the year. Ignored. (9 of 42) The result of a stock split is: A larger number of more valuable shares. An increase in assets. An increase in equity. A larger number of less valuable shares.
Which of the following items would not be included in a basic earnings per share calculation?...
Which of the following items would not be included in a basic earnings per share calculation? Select one: a. undeclared dividends on cumulative preferred stock b. undeclared dividends on noncumulative preferred stock c. declared dividends on noncumulative preferred stock d. declared dividends on cumulative preferred stock
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Convertible Preferred Stock, Convertible Bonds, and EPS Francis Company has 12,000 shares of common stock outstanding at the beginning of 2016. Francis issued 1,500 additional shares on May 1 and 1,000 additional shares on September 30. It also has two convertible securities outstanding at the end of 2016. These are: Convertible preferred stock: 1,250 shares of 9.0%, $50 par, preferred stock were issued on January 2, 2013, for $60 per share. Each share of preferred stock is convertible into 3...
The assumed conversion of convertible debt and preferred stock in diluted earnings per share calculations affects...
The assumed conversion of convertible debt and preferred stock in diluted earnings per share calculations affects Select one: a. neither the numerator nor the denominator. b. the denominator only. c. both the numerator and denominator. d. the numerator only.
E10-16 Effect of Convertible Preferred Stock on Earnings per Share LO 10.4 Pagle Corporation holds 80...
E10-16 Effect of Convertible Preferred Stock on Earnings per Share LO 10.4 Pagle Corporation holds 80 percent of Standard Company's common shares. The companies report the following balance sheet data for December 31, 20X1: Pagle Corporation Standard Company $ $ 58,000 86,000 128,000 740,000 (285,000) 128,000 $ 855,000 48,eee 66,000 78,000 300,000 (145,000) $ 347,000 Assets Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Standard Company Stock Total Assets Liabilities and Owners' Equity Accounts Payable Taxes...
12. The cumulative feature of preferred stock A) limits the amount of cumulative dividends to the...
12. The cumulative feature of preferred stock A) limits the amount of cumulative dividends to the par value of the preferred stock. B) requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders. C) means that the shareholder can accumulate preferred stock until it is equal to the par value of common stock at which time it can be converted into common stock. D) enables a preferred...
Chapter 16: Earnings Per Share Calculations Assignment #1 Basic Earnings Per Share Example 1: Convertible Bonds...
Chapter 16: Earnings Per Share Calculations Assignment #1 Basic Earnings Per Share Example 1: Convertible Bonds Net Income: Bonds Payable: Stated Rate: 1860 75000 0.08 Diluted Earning Per Share Tax Rate: 0.4 AVG number of Share Outstanding: 2000 Additional Sahres after Conversion 7500 Basic Earnings Per Share Diluted Earning Per Share Example 2: Convertible Preferred Staocks Net Income: 1200000 Preferred Stocks: 4000000 Dividend Rate: 0.06 Tax Rate: 0.4 AVG number of Share Outstanding: 600000 Additional Sahres after Conversion 200000 Basic...
In determining basic earnings per share for a year, dividends in arrears on cumulative preferred stock should be Select one: O a. added back to net income whether declared or not. ОО b. disregarded. C. deducted from net income whether declared or not. d. deducted from net income only if declared.
Chapter 19- Earnings per Share 95. A company with a simple capital structure would include which of the following in the computation of earnings per share? A) Convertible securities Number of shares of nonconvertible cumulative preferred shares C) Dividends on nonconvertible cumulative preferred shares D) Dividends on common shares B) Number Ans: C Difficulty: Medium Level of Learning: Knowledge Topic: LO2 96. DCE had 900 common shares outstanding on January 1, 20x3, issued 600 shares on May 1 and had...
In computing earnings per share for a simple capital structure, if the preferred stock is cumulative, the amount that should be deducted as an adjustment to the numerator (earnings) is the preferred dividends in arrears. annual preferred dividend times (one minus the income tax rate). preferred dividends in arrears times (one minus the income tax rate). annual preferred dividend.
(11 of 42) A company has cumulative preferred stock. When computing earnings per share, the current year's dividends on the preferred stock should be: Deducted from earnings for the year. Deducted from common share dividends for the year. Added to earnings for the year. Ignored. (9 of 42) The result of a stock split is: A larger number of more valuable shares. An increase in assets. An increase in equity. A larger number of less valuable shares.
E10-16 Effect of Convertible Preferred Stock on Earnings per Share LO 10.4 Pagle Corporation holds 80 percent of Standard Company's common shares. The companies report the following balance sheet data for December 31, 20X1: Pagle Corporation Standard Company $ $ 58,000 86,000 128,000 740,000 (285,000) 128,000 $ 855,000 48,eee 66,000 78,000 300,000 (145,000) $ 347,000 Assets Cash Accounts Receivable Inventory Buildings and Equipment Less: Accumulated Depreciation Investment in Standard Company Stock Total Assets Liabilities and Owners' Equity Accounts Payable Taxes...
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