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Weighted Average Number of Shares Outdoor Recreation Products Inc. had 50,000 shares of common stock outstanding at the end of 2007. During 2008 and 2009, the following transactions took place. 2008 Mar. 31 Sold 10,000 shares at $24. Apr. 26 Paid cash dividend of...

Diluted Earnings per Share—Conversion of Debentures The following information relates to the December 31, 2007, balance sheet for Chiapucci Incorporated. 6% convertible 10 year debentures  issued at par         ...

Sample CPA Exam Questions 1. Happy Valley Inc. began the year with 100,000 shares of common stock outstanding. The following events occurred during the year relating to common stock: • March 1—2 for 1 stock split • June 1—10% stock dividend • August 1—Sold 10,000...

Earnings per Share—Complex Capital Structure At December 31, 2008, Hemington Company had 320,000 shares of common stock outstanding. Hemington sold 80,000 shares on October 1, 2009. Net income for 2009 was $1,985,000; the income tax rate was 35%. In addition,...

Earnings per Share—Multiple Convertible Securities Data for Dwight Powder Company at the end of 2009 follow. All bonds are convertible as indicated and were issued at their face amounts. Description of Bonds Amount Date Issued Conversion Terms 10 year, 61⁄2 %...

Earnings per Share—Multiple Convertible Securities Kishkumen Company had the following capital structure at December 31, 2008 and 2009:   2009 2008 Shares of stock outstanding:     Common stock 776,490 550,000 $7 convertible preferred stock 11,000...

But Let’s Maintain Earnings per Share On January 1, 2006, Farnsworth Company had 1,000,000 shares of common stock and 100,000 shares of $8 cumulative preferred stock issued and outstanding. A principal goal of Farnsworth’s management is to maintain or increase EPS. On...

Are We in Trouble or Not? Tolman Yacht Company has just completed its determination of EPS for the year. As a result of issuing convertible securities during the year, Tolman’s capital structure is now defined as being complex. The basic EPS for this year is $2.90,...

Once Dilutive, Always Dilutive! As you know, a firm with multiple potentially dilutive securities must individually determine the effect of each security’s incremental per share contribution and include those securities with the smallest incremental contribution to...