Bensman Corporation is computing EPS. One of its subsidiaries has stock warrants outstanding. How do these convertible items affect Bensman’s EPS computation?a. No effect is created because the stock warrants were for the subsidiary company’s shares.b. The stock warrants are not included in the computation unless they are antidilutive.c. The effect of the stock warrants must be computed in deriving the amount of subsidiary income to be included in making the diluted EPS calculation.d. The stock warrants are included only in basic EPS but never in diluted EPS.

Bensman Corporation is computing EPS. One of its subsidiaries has stock warrants outstanding. How do these convertible items affect Bensman’s EPS computation?a. No effect is created because the stock warrants were for the subsidiary company’s shares.b. The stock warrants are not included in the computation unless they are antidilutive.c. The effect of the stock warrants must be computed in deriving the amount of subsidiary income to be included in making the diluted EPS calculation.d. The stock warrants are included only in basic EPS but never in diluted EPS.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter8: Consolidated Tax Returns

Section: Chapter Questions

Problem 1BCRQ

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Choose the correct. Bensman Corporation is computing EPS. One of its subsidiaries has stock warrants outstanding. How do these convertible items affect Bensman’s EPS computation?a. No effect is created because the stock warrants were for the subsidiary company’s shares.b. The stock warrants are not included in the computation unless they are antidilutive.c. The effect of the stock warrants must be computed in deriving the amount of subsidiary income to be included in making the diluted EPS calculation.d. The stock warrants are included only in basic EPS but never in diluted EPS.
Which statement is incorrect? * a. Shares, issued in exchange for the settlement of a liability, are included in EPS calculation from the settlement date. b. Shares, that will be issued upon the conversion of a mandatorily convertible instrument, are included in the calculation of basic EPS from the date the contract is entered into. c. Contingently-issuable shares are treated as outstanding, and are included in the calculation of basic EPS from the date when all necessary conditions are satisfied. none of the above
Which statement is incorrect? * A. EPS disclosures are required for entities whose ordinary shares are publicly traded as well as entities that are in the process of issuing ordinary shares in the public market. B. When an entity issues both consolidated ad separate financial statements, the EPS information is required for the consolidated financial statements only. C. In computing basic EPS, the amount of preference dividends on noncumulative preference shares for the period should be deducted from net income whether declared or not D. In computing the weighted average of shares outstanding, when a share dividend or share split occurs, the additional shares are considered outstanding at the beginning of the earliest year reported. E. none of the above
Which of the following is not a characteristic of the commonstock of a large, publicly owned corporation?a. The shares may be transferred from one investor toanother without disrupting the continuity of businessoperations.b. Voting rights in the election of the board of directors.c. A cumulative right to receive dividends. d. After issuance, the market value of the stock is unre-lated to its par value.
Which statement is incorrect? * Shares, issued in exchange for the settlement of a liability, are included in EPS calculation from the settlement date. Shares, that will be issued upon the conversion of a mandatorily convertible instrument, are included in the calculation of basic EPS from the date the contract is entered into. Contingently-issuable shares are treated as outstanding, and are included in the calculation of basic EPS from the date when all necessary conditions are satisfied. none of the above
Which statement is incorrect? * PAS 33 is required to be used by companies whose shares and potential shares are publicly traded. When an undertaking presents both consolidated and separate financial statements, the disclosures required by PAS 33 need be presented only for the consolidated information Basic EPS amounts uses the profit attributable to ordinary equity holders of the parent undertaking. Basic EPS shall be calculated by dividing the numerator by the weighted-average number of ordinary shares during the period none of the above
Which statement is incorrect? a. PAS 33 is required to be used by companies whose shares and potential shares are publicly traded. b. When an undertaking presents both consolidated and separate financial statements, the disclosures required by PAS 33 need be presented only for the consolidated information c. Basic EPS amounts uses the profit attributable to ordinary equity holders of the parent undertaking. d. Basic EPS shall be calculated by dividing the numerator by the weighted-average number of ordinary shares during the period e. none of the above
Which statement is incorrect? * a. PAS 33 is required to be used by companies whose shares and potential shares are publicly traded. b. When an undertaking presents both consolidated and separate financial statements, the disclosures required by PAS 33 need be presented only for the consolidated information c. Basic EPS amounts uses the profit attributable to ordinary equity holders of the parent undertaking. d. Basic EPS shall be calculated by dividing the numerator by the weighted-average number of ordinary shares during the period none of the above
How would you explain the accounting valuations for the post -control step acquisitions to the Berkshire Hathaway executives? Do you agree or disagree with the GAAP treatment of reporting additional investments in subsidiaries when control has previously been established?
Which method should be used to account for a 16 % ownership in another company's voting stock , assuming the company buying the stock wants to control the decisions of the other company ? Equity Trading Held - to - maturity Available - for - sale How should a company classify debt securities acquired by a corporation which are accounted for by recognizing unrealized holding gains or losses that are included in long - term investments ? trading debt securities never - sell debt securities Oheld - to - maturity debt securities available - for - sale debt securities Under the equity method of accounting for investmentswhat must the company purchasing the shares record each period? percentage of net income ) reported and dividends paid Its percentage of estimated earnings and dividends declared The change in market value of the shares owned NothingNo entries are made in the equity method except at the time of purchase. What effect will transferring investments from the…
Which of the following is NOT included in the cost of an acquired company? (applying section 19 of IFRS for SMEs) a. Contingent consideration determinable at the consummation date of the combination b. Finder’s fee for arranging the combination c. Cost of registering and issuing equity securities d. None of the above
If a parent company has controlling interest in a subsidiary which has no potentially dilutive securities outstanding, then in the calculation of consolidated diluted EPS, it will be necessary to Select one: a. only make an adjustment of subsidiary's basic earnings. b. replace the parent's equity in subsidiary earnings with the parent's equity in subsidiary's diluted EPS. c. make a replacement calculation in the parent's basic earnings for the EPS. d. only use the parent's common shares and shares represented by the parent's potentially dilutive securities.