This playlist covers convertible securities, convertible bonds,convertible preferred stock and accounting for stock options. Intermediate accounting 14 edition test bank by kieso issuu. Earnings per share eps is the monetary value of earnings per outstanding share of common stock for a company in the united states, the financial accounting standards board fasb requires eps information for the four major categories of the income statement. Use the treasury stock method to compute diluted eps 4.
Dilutive securities and earnings per share excel templates. The company computes earnings per share eps using a twoclass method, which is an earnings allocation formula that determines eps for i each class of common stock the company has a. Description multiple choice dilutive securities, conceptual. The staff of the sec division of corporation finance and the office of the chief accountant have revised their policies related to the allocation of expenses and fasb statement no. Chapter 16 intermediate accounting 12th edition kieso, weygandt, and warfield.
Moderate 1525 p161 entries for various dilutive securities. Gaap and igaap are similar as to the presentation of eps, the boards have been working together to resolve remaining differences related to earnings per share computations. Companies with complex capital structures will not report diluted eps if the securities in their capital structure are antidilutive. Describe the accounting for the issuance, conversion, and retirement of convertible securities. Line items represent financial concepts included in a table. Oct 31, 2012 this intermediate accounting video explains dilutive earnings per share, weighted average shares outstanding, dilutive securities, earnings per share, and the treasury stock method. In determining earnings per share, interest expense, net of applicable income taxes, on dilutive convertible debt should be added back to net income for basic earnings per share and ignored for diluted earnings per share. Schedule of antidilutive securities excluded from computation. Dilutive securities and earnings per share multiple choice. File type pdf intermediate accounting chapter 16 solution intermediate accounting chapter 16 solution chapter 16. These books contain exercises and tutorials to improve your practical skills, at all levels. Download our chapter 16 dilutive securities and earnings per share ebooks for free and learn more about chapter 16 dilutive securities and earnings per share. If the bonds are converted at maturity, roche makes the following entry.
Solution manual for intermediate accounting 15th edition. Read this essay on dilutive securities and earnings per share multiple choice. Convertible securities intermediate accounting cpa. Dilutive securities per share 16 dilutive securities and. The previous computation therefore provided the maximum dilution. Chapter 16 12e update dilutive securities and earnings per share assignment classification table by topic topics questions brief exercises. Rmd today announcedresults for its quarter ended september 30, 2015. Chapter 16 dilutive securities and earnings per share business acg 31 with lively at university of south florida studyblue.
Dilutive securities and earnings per share chapter 16 intermediate accounting 12th edition kieso. The normalized earnings yield measures the normalized earnings per share that you receive for the price paid. Chapter 16 dilutive securities and earnings per share optional assignment characteristics table item description be164 issuance of bonds with warrants. Slm corporation supplemental earnings disclosure june 30. Securities having the potential to increase common shares outstanding. The actual conversion of convertible securities or the exercise of options, warrants, or rights 6.
Test bank with answers intermediate accounting 12e by kieso. Start studying chapter 16 dilutive securities and earnings per share. Multiple potentially dilutive securities considered in computing diluted earnings per share 7. Try the following multiple choice questions to test your knowledge of this chapter.
Dilutive securities securities and and earnings earnings per per share share. Starting with the most dilutive, earnings per share is reduced until one of the securities maintains or increases earnings per share. Stockholders equity and dilutive securities and earnings per share. Ch16 kieso intermediate accounting solution manual slideshare. The dilutive securities are then sequentially entered into the diluted earnings per share calculation according to the ranking. Apr 24, 2011 dilutive securities and eps chapter 16 1. Bob anderson, ucsb 2004 161 dilutive securities and earnings per share chapter 16 bob anderson, 2004 162 6a refresher eps earnings. Rmd today announcedresults for its quarter ended june 30, 2015. Restricted stock units and the calculation of basic and. Use the ifconverted method to compute diluted eps 5. Chapter 16 dilutive securities and earnings per share truefalse dilutive securities conceptual answer no. Basic and dilutive earnings per share are generally disclosed for such shares using the twoclass method. Compute earnings per share in a simple capital structure.
Test bank for intermediate accounting, thirteenth edition. Dilutive securities and earnings per share powerpoint slides. Share premiumconversion equity 194,384 bonds payable 2,000,000 share capitalordinary 500,000 share premiumordinary 1,694,384 to record the conversion of bonds at maturity. Intermediate accounting 16a dilutive earnings per share. Dilutive securities and earnings per share dilutive securities and compensation. Start studying ch 16 dilutive securities and earnings per share. Earnings per share eps calculating eps is important, because of its linkage to equity valuation i. Once you have answered the questions, click on submit answers for grading to get your results. Come browse our large digital warehouse of free sample essays. Diluted eps is a performance metric used to assess a companys earnings per share eps if all convertible securities were realized. Stockholders equity and dilutive securities and earnings per. Dilutive securities and earnings per share free download as powerpoint presentation. Chapter 16 1 prepared by coby harmon, university of california, santa barbara learning learning objectives objectives 1. Difference between convertible securities and stock warrants is that upon exercise of the warrants, the holder has to pay a certain amount of money to obtain the shares.
Chapter 16 dilutive securities and earnings per share. Study 32 chapter 16 dilutive securities and earnings per share flashcards from olivia s. Eps only takes into account a companys common shares, whereas diluted eps takes into account all convertible securities such as convertible. Deducted from net income for diluted earnings per share. Tabular disclosure of the weighted average number of shares used in calculating basic net earnings per share or unit and diluted earnings per share or unit. Dilutive securities and earnings per share 1 describe the accounting for the issuance, conversion, and retirement of convertible securities. Earnings per share being in existence for some years, questions on. Professor paul zarowin nyu stern school of business. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. Dilutive securities and earnings per share earnings per. Schedule of antidilutive securities excluded from computation of earnings per share. P1512 analysis and classification of equity transactions penn company was formed on july 1, 2012. Normalized earnings yield can give another perspective to the profitability of a company.
Earnings per share eps is the most common and most complex performance measurement that a publicly held company presents in its quarterly and annual reports. When the firm has no potentially dilutive securities this is called a simple capital structure, the calculation of eps available to common stockholders is. Chapter 16 dilutive securities and earnings per share 16. Dilutive securities and eps chapter 16 share and discover. Chapter 16 dilutive securities and earnings per share chapter 16. Get the knowledge you need in order to pass your classes and more. The accounting guidance for the calculation and reporting of eps can be found in accounting standards codification asc 260, earnings per share, which provides for the calculation and. Apr 20, 2015 easily share your publications and get them in front of issuus millions of monthly readers.
Added back to net income for both basic and diluted earnings per share. When the common shares are issued, there will be a reductiondilutionin earnings per share. Company repurchased 941,000 shares in the fourth quarter. Diluted earnings per share diluted eps definition investopedia. When an increase in earnings per share occurs, the security that causes the increase in earnings per share is excluded. View notes chapter 16 dilutive securities and earnings per share from acc 5115 at wayne state university. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Securities such as convertible debt or stock options are dilutive because their features indicate that the holders of the securities can become common shareholders. Earnings per share calculation that requires dilutive securities be added to the denominator of the basic eps calculation. Diluted eps is a performance metric used to gauge the quality of a companys earnings per share eps if all convertible securities were exercised. Dilutive securities and earnings per share checklist of key figures. Dilutive securities and earnings per share excel workbook templates.
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