答案和详解如下： 26．Nichols Company’s net income for 2006 was $978,000 with 1,250,000 shares outstanding. The average share price in 2006 was $8.50. Nichols issued 2,000 warrants to purchase 100 shares each for $10 per share in 2005. Nichols Company’s diluted earnings per share (diluted EPS) for 2006 is closest to: A) $0.777. B) $0.782. C) $0.793. D) $0.768. The correct answer was B) Nichols basic EPS (net income / weighted average common shares outstanding) was: $978,000 / 1,250,000 = $0.782. Because the exercise price of the warrants is higher than the average share price, the warrants are antidilutive and are excluded from diluted EPS. Because there were no other potentially dilutive securities, Nichols reported only basic EPS in 2006.
27．Young Distributors, Inc. issued convertible bonds two years ago, and those bonds are the only potentially dilutive security Young has issued. In 2005, Young’s basic earnings per share (EPS) and diluted EPS were identical, but in 2004 they were different. Which of the following factors could NOT explain the difference between EPS and Diluted EPS? The: A) bonds were redeemed by Young Distributors at the beginning of 2005. B) average market price of Young increased in 2005. C) bonds were antidilutive in 2005 but not in 2004. D) conversion feature expired at the beginning of 2005. The correct answer was B) Average market price is not a factor in the calculations for including convertible bonds in basic or diluted EPS. All of the other factors listed could be potential explanations for the difference in basic and diluted EPS. 28．Selected information from Caledonia, Inc.’s financial activities in the year 2006 was as follows: § Net Income was $460,000. § 2,300,000 shares of common stock were outstanding on January 1. § The average market price per share was $2 and the year-end stock price was $1.50. § 1000 shares of 8 percent, $1000 par value preferred shares were outstanding on January 1. § Dividends were paid in 2006. 10,000 warrants, each of which allows the holder to purchase 100 shares of common stock at an exercise price of $1.50 per common share, were outstanding the entire year. Caledonia’s Diluted earnings per share (Diluted EPS) for 2006 was closest to: A) $0.165. B) $0.180. C) $0.133. D) $0.149. The correct answer was D) Caledonia’s basic earnings per share (EPS) ((net income – preferred stock dividends) / weighted average common shares outstanding) was ((($460,000 – ($1,000 * 1,000 * .08)) / 2,300,000 =) $0.165. Using the treasury stock method, if the warrants were exercised, cash inflow would be (10,000 * 100 * $1.50 =) $1,500,000. The number of Caledonia shares that could be purchased with the inflow, using the average share price, was ($1,500,000 / $2 =) 750,000. The net increase in common shares outstanding would have been (1,000,000 – 750,000 =) 250,000. Diluted EPS was ($380,000 / (2,300,000 + 250,000 =) $0.149. 29．Kendall Company’s Net Income for 2004 was $830,000 with 200,000 shares outstanding. In 2003, Kendall issued 1,000 six percent $1,000 convertible (into 20 common shares each) bonds that were outstanding since 2003. Kendall’s tax rate was 40 percent. What was Kendall Company’s diluted earnings per share (Diluted EPS) for 2004? A) $4.15. B) $3.93. C) $3.77. D) $4.04. The correct answer was B) Kendall’s basic EPS was ($830,000 / 200,000 =) $4.15. To compute Diluted EPS, bond interest paid net of taxes is added back to net income in the numerator of the EPS equation, and the number of shares that would be issued in the conversion is added to the denominator. Kendall’s Diluted EPS was (($830,000 + (1,000 * $1,000 * 0.06) * (1– 0.4)) / (200,000 + (20,000)) = $3.93). Note that since diluted EPS is less than basic EPS, we know that the bonds are dilutive and should be considered in calculating diluted EPS. 30．Quad Associates, Inc.’s net income for 2005 was $892,000 with 400,000 shares outstanding. The tax rate was 40 percent. Quad had 2,000 six percent $1,000 par value convertible bonds that were issued in 2004. Each bond was convertible into 40 shares of common stock. Quad, Inc.’s diluted earnings per share (Diluted EPS) for 2005 was closest to: A) $2.23. B) $2.41. C) $2.01. D) $2.11. The correct answer was C) Quad’s basic EPS (net income / weighted average common shares outstanding) was ($892,000 / 400,000 = $2.23.) Diluted EPS is calculated under the assumption that the convertible bonds are converted into common stock as of January 1, 2001, the bond interest net of tax is restored to net income, and the additional common shares are added to the denominator of the equation. Quad’s diluted EPS was (($892,000 + ((2,000 * $1,000 * .06)(1 - .40)) / (400,000 + (2,000 * 40)) =) $2.01. Note that since diluted EPS is less than basic EPS, we know that the bonds are dilutive and should be considered in calculating diluted EPS. | 
发表于 2008-4-10 11:59
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