中级财务会计英文ch11

Chapter11-1DilutiveSecuritiesandEarningsPerShareChapter11IntermediateAccounting12thEditionKieso,Weygandt,andWarfieldPreparedbyCobyHarmon,UniversityofCalifornia,SantaBarbaraChapter11-21.Describetheaccountingfortheissuance,conversion,andretirementofconvertiblesecurities.2.Explaintheaccountingforconvertiblepreferredstock.3.Contrasttheaccountingforstockwarrantsandforstockwarrantsissuedwithothersecurities.4.Describetheaccountingforstockcompensationplansundergenerallyacceptedaccountingprinciples.5.Discussthecontroversyinvolvingstockcompensationplans.6.Computeearningspershareinasimplecapitalstructure.7.Computeearningspershareinacomplexcapitalstructure.LearningObjectivesChapter11-3Anearningsmeasurementthatisbasedonthereturnonapersharebasisratherthanthetotalearningsofacompany.SignificanceofEarningsPerShare(EPS)Chapter11-4MarketPriceofStockEPSPriceEarningsRatioChapter11-5Unconditionalconversionsandexercises--CommitmentsthatallowunrestrictedincreasesinoutstandingcommonsharestooccuratanytimeConditionalconversionsandexercises--CommitmentsthatallowincreasesinoutstandingcommonsharesatsomefuturedateifcertainconditionsaremetDilutionofEPSChapter11-6ComplexCapitalStructure(dualEPS)CapitalStructure(includingconvertibledebt)SimpleCapitalStructure(basicEPS)Chapter11-7CapitalStructure(includingconvertibledebt)IncomedividedbyaveragenumberofcommonsharesoutstandingIncomeminusnonconvertiblepreferredstockdividendclaimsdividedbyaveragenumberofcommonsharesoutstandingSimpleCapitalStructure(basicEPS)Inasimplecapitalstructure,stockholders’equityconsistsof:CommonstockorCommonstockandnonconvertiblepreferredstockChapter11-8CapitalStructure(includingconvertibledebt)ComplexCapitalStructure(dualEPS)Dilution/AntidilutionTestEquitycontractsConvertiblesecuritiesUsetreasurystockmethodUseif-convertedmethodContingentlyissuablesharesPotentiallydilutivesecurities:ConvertiblepreferredstockConvertiblebondsContingentcommonstockissuesStockrightsStockoptionsChapter11-9EPSappliesonlytocommonstock.Calculatedas:Netincome(aftertax)-Preferreddividends*Weightedaverageoutstandingcommonstock*Currentperiod’scumulativepreferredstockdividends(whetherornotdeclared)andnoncumulativepreferredstockdividends(onlyifdeclared)aresubtractedbecausetheserepresentthepreferredstock’sclaimtothecurrentearnings.EPSCalculationChapter11-10Acompanyhad200,000sharesof$50parvaluecommonstock,10,000of5%,$20parvaluecumulativepreferredstock,and30,000sharesof5%,$10parvaluenoncumulativepreferredstockoutstandingduringtheyear.Netincomeaftertaxeswas$1,500,000.Nodividendsweredeclaredduringtheyear.EPSwouldbea.$7.50b.$7.43c.$7.45d.$7.38EPSQuestionChapter11-11Acompanyhad200,000sharesof$50parvaluecommonstock,10,000of5%,$20parvaluecumulativepreferredstock,and30,000sharesof5%,$10parvaluenoncumulativepreferredstockoutstandingduringtheyear.Netincomeaftertaxeswas$1,500,000.Nodividendsweredeclaredduringtheyear.EPSwouldbea.$7.50b.$7.43c.$7.45d.$7.38$1,500,000-(10,000×5%×$20par)200,000sharesSincedividendswerenotdeclared,onlythecumulativepreferredstockdividendsaresubtracted.EPSQuestionChapter11-12Basiccalculation(review):Netincome(aftertax)-Preferreddividends*Weightedaverageoutstandingcommonstock*Currentperiod’scumulativepreferredstockdividends(whetherornotdeclared)andnoncumulativepreferredstockdividends(onlyifdeclared)ComputingEPSSimpleCapitalStructureChapter11-13Basiccalculation(review):Netincome(aftertax)-Preferreddividends*Weightedaverageoutstandingcommonstock*Currentperiod’scumulativepreferredstockdividends(whetherornotdeclared)andnoncumulativepreferredstockdividends(onlyifdeclared)Numberofsharesoutstanding×Numberofmonthsoutstanding/12WeightedaveragesharesoutstandingComputingEPSSimpleCapitalStructureChapter11-14MonthsSharesSharesFractionofYearEquivalentAreOutstandingOutstandingOutstandingWholeUnitsJanuary-February12,000x2/12=2,000March-June14,700x4/12=4,900July-November18,000x5/12=7,500December17,520x1/12=1,46015,860TotalweightedaveragecommonsharesMcTealCorporationhad12,000sharesofcommonstockoutstandingatthebeginningoftheyear.OnMarch2,itissued2,700shares;onJuly3,itissuedanother3,300shares,andonDecember1,itreacquired480sharesastreasurystock.ThenearestwholemonthisusedWeightedAverageSharesChapter11-15Commonsharesissuedaspartofstockdividendsandstocksplitsaretreatedretroactivelyassubdivisionsofthesharesalreadyoutstandingatthedateofthesplitordividend.ComputingEPSSimpleCapitalStructureChapter11-16Retroactivetreatment:Ifnewshareswerenotissuedintheperiod,thestockdividendorsplitistreatedasoutstandingfromthebeginningoftheperiod.Ifnewshareswereissuedintheperiod,thestockdividendorsplitisappliedretroactivelyinproportiontothenumberofsharesoutstandingatthetimeofthedividendorsplit.ComputingEPSSimpleCapitalStructureChapter11-17WallerscorporationbeginsoperationsinJanuary2007,andissues5,000sharesofcommonstockthatareoutstandingallduring2007.OnDecember31,2007,itissuesa2-for-1stocksplit.MonthsSharesSharesFractionofYearEquivalentAreOutstandingOutstandingOutstandingWholeUnitsJanuary-December5,000x12/12=5,000Totalweightedaverage