Match each term, 1 through 12 with its impact on the EPS calculation. Assume a simple capital structure unless the scenario indicates otherwise. Ignore the possibility of antidilutive securities and the initial impact on net income of a particular transaction. A scenario may have more than one impact on the EPS calculation. Scenario 1. Noncumulative, 7% preferred stock dividend with no dividend declaration. 2. Cumulative, 7% preferred stock dividend with no dividend declaration. 3. Issuance of stock options. 4. Retirement of common shares. 5. Stock dividend declared during the year. 6. Stock dividend declared after the calender year but before financial statements are issued. 7. Stock split. 8. Issuance of convertible noncumulative preferred stock with no dividend declaration. 9. Issuance of convertible bonds. 10. Conditions for issuance are met for unisssued contingent shares. 11. Purchase of shares for the treasury. 12. Granting of restricted common stock (not vested). Effects numerator Effects denominator Effects numerator Effects denominator No impact on Scenario in Basic EPS calculation in Basic EPS calculation in Diluted EPS calculation in diluted EPS calculation EPS calculation 2 Yes No 6 8 10 11 12

Match each term, 1 through 12 with its impact on the EPS calculation. Assume a simple capital structure unless the scenario indicates otherwise. Ignore the possibility of antidilutive securities and the initial impact on net income of a particular transaction. A scenario may have more than one impact on the EPS calculation. Scenario 1. Noncumulative, 7% preferred stock dividend with no dividend declaration. 2. Cumulative, 7% preferred stock dividend with no dividend declaration. 3. Issuance of stock options. 4. Retirement of common shares. 5. Stock dividend declared during the year. 6. Stock dividend declared after the calender year but before financial statements are issued. 7. Stock split. 8. Issuance of convertible noncumulative preferred stock with no dividend declaration. 9. Issuance of convertible bonds. 10. Conditions for issuance are met for unisssued contingent shares. 11. Purchase of shares for the treasury. 12. Granting of restricted common stock (not vested). Effects numerator Effects denominator Effects numerator Effects denominator No impact on Scenario in Basic EPS calculation in Basic EPS calculation in Diluted EPS calculation in diluted EPS calculation EPS calculation 2 Yes No 6 8 10 11 12

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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