Lesson 16 Earnings Per Share

Question 1

The per share amount must be reported on the face of a public company’s income statement for which of the following ?

Answer 1

Income from continuing operations

Question 2

The if converted method of computing earnings per share data assumes conversion of convertible auditors as of the ?

Answer 2

Beginning of the earliest period reported (or at time of issuance if later)

Question 3

In determining EPS, interest expense, net of applicable income taxes, on convertible debt that is dilutive should be ?

Answer 3

Added back to net income for diluted earnings per share

Question 4

Basic earnings per share formula

Answer 4

Net income - preferred Stock Dividend/ weighted Avg # of Outstanding common shares

Question 5

exercise price > market price

for the stock options which makes them

Answer 5

Anti dilutive

Question 6

Treasury stock repurchases is subtracted from ?

Answer 6

Weighted average of common stock

Question 7

When preferred stock is cumulative the annual preferred dividend reduced net income regardless of amount paid.

Preferred stock, $12 par, 5% cumulative, 20,000 shares issued and outstanding $240,000

What do I deduct from Net income ?

Answer 7

240,000 x 5%= 12,000

Question 8

How to calculate interest in dilutive convertible bonds ?

Answer 8

Face Value x stated rate of interest + amortized discount x tax rate (1-.25)

Net income + Convertible bond interest