Reading 32: Understanding the Income Statement - LOS i ～ Q

答案和详解如下：

36．In calculating the numerator for diluted Earnings Per Share, the dividends on convertible preferred stock are:

A)   subtracted from earnings available to common shareholders without an adjustment for taxes.

B)   added to earnings available to common shareholders with an adjustment for taxes.

C)   subtracted from earnings available to common shareholders with an adjustment for taxes.

D)   added to earnings available to common shareholders without an adjustment for taxes.

The correct answer was D)    

Formula = Diluted EPS = [(Net income - Preferred dividends) + Convertible preferred dividends + (Convertible debt interest)(1 - t)] / [(Weighted average shares) + (Shares from conversion of conv. pfd shares) + (Shares from conversion fo conv. debt) + (Shares issuable from stock options)]

37．In calculating the numerator for diluted Earnings Per Share, the interest on convertible debt is:

A)   added to earnings available to common shareholders.

B)   added to earnings available to common shareholders after an adjustment for taxes.

C)   subtracted from earnings available to common shareholders.

D)   subtracted from earnings available to common shareholders after an adjustment for taxes.

The correct answer was B)

Formula = Diluted EPS = [(Net income - Preferred dividends) + Convertible preferred dividends + (Convertible debt interest)(1 - t)] / [(Weighted average shares) + (Shares from conversion of conv. pfd shares) + (Shares from conversion of conv. debt) + (Shares issuable from stock options)]

38．Anti-dilutive securities should:

A)   be used in calculating diluted EPS but not basic EPS.

B)   not be used in calculating basic or diluted EPS.

C)   be used in calculating basic EPS but not diluted EPS.

D)   be used in calculating simple earnings per share.

The correct answer was B)

Antidilutive securities would increase EPS if exercised or converted to common stock.

39．Securities that improve basic per share earnings, or reduce per share losses, if they are exercised or converted to common stock are called:

A)   dilutive securities.

B)   antidilutive securities.

C)   embedded securities.

D)   contingent securities.

The correct answer was B)    

Antidilutive securities, upon exercise, increase basic EPS or decrease per share losses. Shares from conversion are not included in the calculation of basic or diluted EPS.

40．Securities that would decrease earnings per share (EPS) if they were exercised and converted to common stock are called:

A)   synthetic securities.

B)   derivative securities.

C)   antidilutive securities.

D)   dilutive securities.

The correct answer was D)

Dilutive securities are securities that decrease EPS if they are exercised or converted to common stock. Stock options, warrants, convertible debt, and convertible preferred stock are examples of dilutive securities.