FAR 4

Question 1

Basic EPS

Answer 1

Net income - Preffered stock dividends / Weighted average num of common stocks

Question 2

2 things to consider for denominator for EPS

Answer 2

1) stock splits (assumed it happened in the beg)

2) Dividends (assumed it happened in the beg)

Question 3

What is Diluted EPS (DEPS)

Answer 3

assume any convertible securities (stock options, convertible debt) to be commons

if, conversion result in decrease in EPS, its included in the calculation

if not, exluded from EPS

(net income - preferred stock dividends) + convertible preferred stock div + convertibel debt int

Question 3

What are things that are considered to take place in the beginning of the year

Answer 3

1) Stock Dividends
2) stock splits

Question 4

When stock split happens in year3, how can it affect yr2 common stock outstanding?

Answer 4

We have to double the common stock outstanding for yr 2
as well

Question 5

In diluted EPS, how is convertible preferred stock is treated?

Answer 5

AS if it was converted into common stocks in the beginning of the year

Question 6

Denominator of EPS

Answer 6

= commonstock + DIVIDENDS + split

Question 7

Deadline for 10-k and 10-Q for large company

Answer 7

10-k: 60days
10-Q: 40days

Question 8

number of outstanding common share
1-3 10000
3-6 12000
7-12 10000

How much is denominator

Answer 8

100001/3
120004/12
10000*6/12

Question 9

How do you treat stock option in calculating eps

Answer 9

S.O. = potential common stock,
if exercise price i slower than mkt price, added to denominator

Question 10

How to treat bond premium

Answer 10

less
r. bond exp = Stated interest - bond premium

Question 11

common stock repurchased means

Answer 11

treasury stock transaction

Question 12

How to treat amortization expenses for numerator

Answer 12

Added to NI

Question 13

for SPF, what to begin with to deal with NI

Answer 13

start from NI, add or subtract current asset/ liablity

Question 14

for SPF, what to begin with to deal with EXP

Answer 14

0) create a journal entry
1) cash received or paid
2) debit or credit As/Li
3) difference btw D/C is exp

Question 15

How to record credit loss for income tax basis?

Answer 15

Direct wirte-off (no allowance for,,,)

Question 16

StkDiv is treated as if`

Answer 16

期首発生

Question 17

cumulative pref div in arear 20k, annual cum pref 12k, which amount to include in EPS calculation

Answer 17

12k (in arreaは含まない）

Question 18

noncumulative pref div, declared none, annualy 12k, what amount to include in eps calculation

Answer 18

0 (noncum, if cum annual)

Question 19

Form 8k, what and when

Answer 19

major event, wi 4days after major event

Question 20

convertible preferred stock issued in july, convertible into 300 shares of cm, how many do you include for diluted eps

Answer 20

300, not 150