Copley Corporation is preparing their financial statements for the year ending February 28, 2022. Copley Corporation has two categories of stock: Preferred and Common. The preferred stock is structured such that the holders of the preferred stock may convert one share of preferred stocks into one share of common stock if the market price of the common stock is greater than $1,000. As of February 28, 2022, the market price of the common stock had never reached $1,000. In the preparation of the 2/28/22 Income Statement Copley’s staff accountant was calculating the Basic and Diluted EPS. While calculating the diluted EPS the staff accountant is unsure of whether to include the potential impact of the convertible preferred stock since the trigger conversion price had not been met as of 2/28/22. Accounting Issue: In the calculation for Diluted EPS should Copley Corporation include the impact of the convertible preferred stock since the trigger conversion price of $1,000 had not been met as of February 28, 2022? Should Copley Corporation include the impact of the convertible preferred stock in the calculation of diluted EPS since the trigger conversion price of $1,000 had not been met as of February 28, 2022? Yes No
Copley Corporation is preparing their financial statements for the year ending February 28, 2022. Copley Corporation has two categories of stock: Preferred and Common. The
Accounting Issue: In the calculation for Diluted EPS should Copley Corporation include the impact of the convertible preferred stock since the trigger conversion price of $1,000 had not been met as of February 28, 2022?
Should Copley Corporation include the impact of the convertible preferred stock in the calculation of diluted EPS since the trigger conversion price of $1,000 had not been met as of February 28, 2022?
- Yes
- No
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