Earnings per share: Earnings per share (EPS) indicates the income earned per share of common stock. EPS is calculated as Basic EPS and Diluted EPS.
The income for EPS is calculated by subtracting the preference dividends. The income is divided by weighted-average common shares outstanding. This is Basic EPS. Basic EPS does not consider the dilutive effects of convertible long-term debts. Diluted EPS is based on the assumption that all convertible securities like
(a) To determine: To determine whether the contingent shares have to be considered in 2016 earnings per share computations.
(b) To explain: To explain whether the contingent shares have to be considered in earnings per share computations for 2016.
Want to see the full answer?
Check out a sample textbook solutionChapter 16 Solutions
INTERMEDIATE ACCOUNTING W/ WILEYPLUS >
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education