A seller of the stock option is called an option writer, where the seller is. Chapter 16 solution manual finance fin300 neu studocu access intermediate accounting 8th edition chapter 16 solutions now. Include dilutive stock options and warrants and compute a tentative diluted earnings per share deps. Read online chapter 16 kieso ifrs chapter 16 kieso ifrs accounting chapter 16 dilutive securities and eps convertible securities intermediate accounting cpa exam far chp 16 p 1 visit. Ch16 kieso intermediate accounting solution manual slideshare. In a complex capital structure, diluted earnings per share is not reported when the securities included in the capital structure are antidilutive. Describe the accounting for the issuance, conversion, and retirement of. Gallery potentially solutions earning perfect images are great you wont find a better image of solutions earning anti nice one, need more earning anti test images like this i loved this image of anti test benefit test benefit convertible got awesome comments in 2015. Convertible securities intermediate accounting cpa. Share premiumconversion equity 194,384 bonds payable 2,000,000 share capitalordinary 500,000 share premiumordinary 1,694,384 to record the conversion of bonds at maturity. Chapter 16 dilutive securities and earnings per share ifrs questions. Chapter 16 dilutive securities and earnings per share search trends. Impact of stock options and stock warrants if dilutive 4. Dilutive securities and earnings per share excel templates.
Chapter 16 dilutive securities and earnings per share truefalsedilutive securitiesconceptual answer no. Ifrs questions are available at the end of this chapter. Dilutive securities and 16 earnings per share 1618 dilutive securities warrants are certificates entitling the holder to acquire shares of stock at a certain price within a stated period. Bob anderson, ucsb 2004 161 dilutive securities and earnings per share chapter 16 bob anderson, 2004 162 6a refresher eps earnings. If the bonds are converted at maturity, roche makes the following entry. Dilutive securities and earnings per share flashcards from ibrahim n. Dilutive securities and eps chapter 16 share and discover. Dilutive securities and earnings per share chapter 16 dilutive securities and earnings per share ifrs questions are available at the end of this chapter. Anti dilutive securities and eps explanation and examples. Reporting additional payment to encourage conversion.
There also several financial ratios like the dilutive earnings per share that track the effect of these securities. Part 2 intermediate accounting chapter 2 lecture part 3 chapter 16. Discuss the controversy involving share compensation plans. The likelihood of conversion or exercise of antidilutive securities is considered remote. Describe the accounting for the issuance, conversion, and retirement of convertible selection from intermediate accounting, 15th edition book. Solutions manual for instructor use only 161 chapter 16 dilutive securities and earnings per share assignment classificationtable by topic topics questions brief exercises exercises problems concepts for analysis 1. Chapter 16 dilutive securities and earnings per share optional assignment characteristics table item description be164 issuance of bonds with warrants. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Chapter 6 dilutive securities and earnings per share 16. Mar 11, 2020 diluted earnings per share diluted eps. Compute earnings per share in a simple capital structure.
Existing stockholders have a preemptive right to purchase common stock. Chapter 16 12e update dilutive securities and earnings per share assignment classification table by topic topics questions brief exercises. Chapter 16 dilutive securities and earnings per share 163 conversion of bonds at maturity. Earnings per sharecomplex capital structure e1626 eps with options. Prepared by coby harmon, university of california, santa barbara. Ch16 dilutive securities and earnings per share earnings per.
Initial issue of stock 800,000 shares april 1, 2014 issue 34 x 400,000 300,000shares total. Dilutive securities example of how dilution impacts. Prepared by coby harmon, university of california, santa barbara learning objectives 1. Chapter 16 dilutive securities and earnings per share chapter 16. Chapter 16 dilutive securities and earnings per share ifrs questions are available at the end of this chapter. The actual conversion of convertible securities or the exercise of options, warrants, or rights 6. Antidilutive securities are those that, upon conversion or exercise, increase earnings per share or reduce loss per share. Moreover, similar to you finish this book, you may not deserted. Securities such as convertible debt or stock options are dilutive because their features indicate that the holders of. Diluted eps shows the maximum potential adverse effect on eps if dilutive securities are converted to common stock. Chapter 16 dilutive securities and earnings per share truefalsedilutive. Chapter 6 dilutive securities and earnings per share 16 1. Convertible securities intermediate accounting cpa exam.
View notes chapter 16 dilutive securities and earnings per share from acc 5115 at wayne state university. For instructor use only 1611 questions chapter 16 continued. The idea is that if a security increases the outstanding shares it will dilute the current shareholders stake in the company as well as their owner benefits like future. Compute earnings per share in a complex capital structure. A dilutive security is any type of investment security that has the potential to increase the number of common shares outstanding. Dilutive securities and earnings per share earnings per. Use the treasury stock method to compute diluted eps 4. Dilutive securities and earnings per share accounting 302 with prof. Chapter 1625 lo 7 compute earnings per share in a complex capital structure. Your curiosity approximately this pdf will be solved sooner when starting to read. Convertible securities may be dilutive on their own but antidilutive when included with other potential common shares in computing diluted eps. Dilutive securities and earnings per share multiple choice. Chapter 16 solution manual finance fin300 neu studocu.
To access resources such as quizzes, powerpoint slides, cpa exam questions, and cpa. Describe the accounting for share compensation plans. Apr 24, 2011 dilutive securities and eps chapter 16 1. In this topic, we discuss the accounting for these dilutive securities and stockbased compensation plans. You may want to read this about chapter 16 dilutive. Develop a ranking of the impact of each convertible preferred stock and convertible bond on deps. Diluted eps is a performance metric used to gauge the quality of a companys earnings per share eps if all convertible securities were exercised. Read book chapter 2 intermediate accounting solutions. Dilutive securities and earnings per share powerpoint slides. Diluted eps shows the maximum potential adverse effect on eps if.
Nov 08, 2018 dates outstanding shares outstanding fraction of year weighted shares jan. Moderate 1525 p161 entries for various dilutive securities. When the common shares are issued, there will be a reductiondilutionin earnings per share. Description multiple choicedilutive securities, conceptual. To access resources such as quizzes, powerpoint slides. Dilution can be caused due to a number of dilutive securities such as stock options stock option a stock option is a contract between two parties which gives the buyer the right to buy or sell underlying stocks at a predetermined price and within a specified time period. In other words, its any securities that can be turned into common stock. Additionally, the impact of dilutive securities and stockbased compensation plans on earnings per share is also discussed in this topic. Use the ifconverted method to compute diluted eps 5. Chapter 16 dilutive securities and earnings per share. As you can see, there are many different types of securities that can affect the number of outstanding shares of common stock. Dilutive securities and earnings per share dilutive securities and compensation.
True in the diluted earnings per share computation, the treasury stock method is used for options and warrants to reflect assumed reacquisition of common stock at the average market price during the. Chapter 16 dilutive securities and earnings per share learning objectives after studying this chapter, you should be able to. Multiple potentially dilutive securities considered in computing diluted earnings per share 7. Dilutive securities and 16 earnings per share 16 18 dilutive securities warrants are certificates entitling the holder to acquire shares of stock at a certain price within a stated period. Dilutive securities and eps chapter 16 linkedin slideshare. Comprehensive earnings per share example slide content. Problem p1 part 4exercising warrants suggested homework problems for chapter 16 quiz 1 has 10 questions these hw problems cover all the material for that quiz 1. Nov 05, 2015 earnings per share, simple earnings per share, complex earnings per share, dilutive securities,weighted average number of shares outstanding, diluted earnings per share, if converted feature, category. Jan 01, 2011 chapter 16 dilutive securities and earnings per share 163 conversion of bonds at maturity. After studying this chapter, you should be able to. Download as doc, pdf, txt or read online from scribd.