Question

Answer 16,17,18,19

15. Executive stock options should be reported as compensation expense: A) Using the intrinsic value method. B) Using the fair value method. C) Using either the fair value method or the intrinsic value method. D) Only on rare occasions. 16. Capital Consulting Company had 400,000 shares of common stock outstanding on December 31, 2018. On March 1, 2018, the company's common stock split 3-for-1. On December 15, 2018, a preferred dividend was declared and paid in the amount of $25,000. Net income for 2018 was $3,000,000 What is basic earnings per share (rounded to 2 decimal places) for the year ended December 31, 2018? 17. XYZ Company had 200,000 shares of common stock outstanding on December 31, 2017. On July 1, 2018, XYZ issued an additional 50,000 shares for cash. On January 1, 2018, XYZ issued 20,000 shares of convertible preferred stock. The preferred stock had a par value of $100 per share and paid a 5% dividend. Each share of preferred stock is convertible into 8 shares of common. During 2018, XYZ paid the regular annual dividend on the preferred. Net income for the year was $300,000. What is XYZ basic earnings per share (rounded to 2 decimal places) for 2018? Hint: Calculate the preferred dividend amount & include it in the numerator formula. Use wid average shares ol's in the denominator 18. Based on the facts in question 17, what is XYZ's diluted earnings per share (rounded to 2 decimal places) for 2018? $_ Are the conversion shares dilutive or antidilutive? Hint: Do not include preferred dividends amount in the numerator and add the new shares from the conversion to the denominator: basically the basic EPS wtd average shares plus new shares from the conversion. 19. Treasury stock shares and common stock share issued are both included in the calculation to determine weighted average outstanding shares. TRUE FALSE? 20. Dublin Inc. had the following common stock record during the current calendar year: Outstanding beginning of year Additional shares issued 6/30 Additional shares issued 9/30 2,000,000 100,000 100.000 A 10 stock dividend was pada December. What is the number of shares to be used in computing basic EPS? A) 2.075.000 B) 2,282,500 C) 2.475.000 D) 2.620.000

Answer 1

Answesos Executive stock ophors should to reported as Conyersahon Dipende: weighted Common lorem Deco Sooo 2019 Answer Q 16. Net Dut Basic Easning peo share poefened Dividende nole Weighted Average Common shares out standing Preferre = 20,00,000 - 25,000 1200000 Slados have Note: Weighted Auedage Common share - 400000 shares X 3 astea stocu spilt = 1200 250 Con V Basic Earning per share - Net provrt - poolesed Dividendo weighted herage common Shanes outstanding $300 - 50,000 385000 = 0.6s por share

BANK classmate shed weighted Average Common share outsanding Common share outstanding Dec 31 200000 shares. X 12m = Nos shaves 200 GOD 12 m vidends Joly, 2011 50,000 share X 6 month = 25000 12 mon Preferred Dividend = 20,000 X 100 X soy el Anton = 2.48. 50,000 Share. common wes X3 Con Veach bleShare = 20,00y 8 = 160.000 shares d. Total common shade. doooo f25000 + 160000 385000 violends non

BUANO CASSH ng Value Q 18. Diluted Gaoning per share Net Income + Aften tax cost interes Common share + Additional outstanding Share against convertible Secunties. - 300 ono 250000t 160000 2 78 pea share Convertible share are deloture. Qlg. The starement is False Only common stock shares are included in determining wergured Average share.