Quiz – Falwell Inc.
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
Determine the company’s basic earnings per share.
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Determine the company’s basic earnings per share.
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Determine the total compensation cost using restricted stock units for Lance Chips.
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Given net income along with information about shares issued they ask you to compute basic and diluted EPS.
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Using intrinsic value accounting for employee stock options is a requirement under GAAP.
It is necessary to adjust the fair value estimate of stock options on the grant date if prior experience indicates that a material number of options will be forfeited before vesting.
When a company issues stock dividends and splits in the current year, it is necessary to retrospectively restate the earnings per share (EPS) for all prior years presented in comparative financial statements.
When computing diluted earnings per share (EPS), the inclusion of dilutive convertible bonds impacts both the numerator and the denominator.
In computing earnings per share (EPS), the dilutive effect of convertible preferred stock, EXCEPT for tax considerations, is generally handled in a similar way as convertible debt.
The computation of basic earnings per share (EPS) does NOT require any time-weighting adjustment for contingently issuable shares.
When a company reports discontinued operations in its financial statements, it is necessary to disclose earnings per share (EPS) for both income from continuing operations and net income.