Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Textbook Question
Chapter 6, Problem 9P
Bens man 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.
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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.
Zebra Corporation is a publicly traded company. Which method will Zebra use to
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a. Contingent consideration determinable at the consummation date of the combination
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Chapter 6 Solutions
Advanced Accounting
Ch. 6 - Prob. 1QCh. 6 - Prob. 2QCh. 6 - When is a firm required to consolidate the...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - How do noncontrolling interest balances affect the...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Prob. 17QCh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Prob. 3PCh. 6 - Prob. 4PCh. 6 - Prob. 5PCh. 6 - Prob. 6PCh. 6 - Problems 7 and 8 are based on the following...Ch. 6 - Prob. 8PCh. 6 - Bens man Corporation is computing EPS. One of its...Ch. 6 - Prob. 10PCh. 6 - Prob. 11PCh. 6 - Prob. 12PCh. 6 - Prob. 13PCh. 6 - Prob. 14PCh. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 37PCh. 6 - Prob. 38PCh. 6 - Prob. 39PCh. 6 - Prob. 40PCh. 6 - Prob. 41PCh. 6 - Prob. 42P
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- When the company selling previously issued shares to another company or individual. This a transaction that would be traded in the primary market. Select one: True Falsearrow_forwardWhen a company acquires an affiliated company’s debt instruments from a third party, how is the gain or loss on extinguishment of the debt calculated? When should this balance be recognized?arrow_forwardWhich of the following statements is not true of the fair-value method of accounting for marketable securities? Select one: A. The investment account is recorded at current fair value on the balance sheet. B. Interim changes in the investments’ fair value may or may not affect income depending on the securities’ classification. C. This method is used when the reporting company generally owns less than 20% of the investee company. D. Dividends are treated as a return of the capital invested. E. None of the abovearrow_forward
- 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 abovearrow_forwardIf share warrants were exercised by the holder of compound financial instrument, liability would be derecognize a debit to the equity account related to share warrants will be done a credit to the equity account related to share warrants will be done share warrants outstanding account will not be affected.arrow_forwardMultiple Choice Theories 1. EPS disclosures are a. Encouraged for all entities b. Required for all entities C. Encouraged for public entities and required for nonpublic entities. d. Required for public entities and encouraged for nonpublic entities. 2. Earnings per share is calculated before accounting for which of the following items? a. Preference share dividend for the period b. Taxation c. Non-controlling interest d. Ordinary share dividend 3. Undeclared dividends are deducted from profit or loss in the earnings per share computation for which type of preference shares? a. Non-cumulative only. b. Cumulative only. C. Neither non-cumulative nor cumulative. d. Both non-cumulative and cumulative 4. The following are considered returns to the preference shareholders and are deducted in calculating profit or loss attributable to ordinary equity holders, except a. Undeclared dividends for the period on cumulative preference b. Loss on settlement of preference shares. C. Amortization of…arrow_forward
- 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 abovearrow_forwardIf 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.arrow_forwardWhich of the following is characteristic of liabilities ratherthan of equity? (More than one answer may be correct.)a. The obligation matures.b. Interest paid to the provider of the capital is deductiblein the determination of taxable income.c. The capital providers’ claims are residual in the eventof liquidation of the business. d. The capital providers normally have the right to exer-cise control over business operations.arrow_forward
- 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 abovearrow_forwardWhat is a noncontrolling interest? Select one: A. A component of debt representing amounts owed to a subset of investors B. Amounts distributed to investors that own less than a controlling interest C. The portion of a subsidiary’s net assets not owned by the parent-company D. An amount equal to investor contributions less dividends distributedarrow_forwardA parent company acquires from a third party bonds that had been issued originally by one of its subsidiaries. What accounting problems are created by this purchase?arrow_forward
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Earnings per share (EPS), basic and diluted; Author: Bionic Turtle;https://www.youtube.com/watch?v=i2IJTpvZmH4;License: Standard Youtube License