FAR 16 - EPS Flashcards
Is Cumulative 9%, $30 par preferred stock dilutive?
No, since it is not convertible to common stock
A public company is required to report per share amounts for….
- income from continuing operations
- net income
- disclosed operations
In basic earnings per share calculations, are dividends and dilutive stock included?
dilutive stock is not included, but dividends is included regardless of if it has been declared or paid (it is assumed to have been paid)
are dividends on noncumulative preferred shares included in basic eps calc?
No. For noncumulative preferred shares, only dividends declared are included in the calculation
are dividends on cumulative preferred shares included in basic eps calc?
Yes. Cumulative preferred stock dividends are included whether or not they are declared but for the current year only. No prior’s years are included.
What is a small stock dividend?
a stock dividend of less than 20-25%
How are small stock dividends recorded?
small stock = market value
it is debited to retained earnings at its MARKET VALUE
What is a large stock dividend?
a stock dividend of greater than 20-25%
How are large stock dividends recorder?
large stock = par value
it is debited to retained earnings at its PAR VALUE
what is the order of dividends paid when there are fully participating preferred stock?
- preferred stock according their percentage
- common stock according to preferred percentage
- remaining allocated pro rate to preferred and common
