EPS Accounting Report: Development and Problems Earnings per share is the portion of a company’s profit allocated to each outstanding share of common stock. The computation of earnings per share is income minus preferred stock dividends divided by weighted average number of shares of common stock outstanding at the end of the period. Earning per share is considered to be the single most important metric to determine a company’s profitability which is crucial to the decision making of potential
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000 shares of common stock outstanding and Pancino had 50‚000 shares of common stock outstanding. Sakal’s only dilutive security consists of 2‚500 stock options‚ with an exercise price of $20 per share. The average price of Sakal’s stock is $50 per share in 2010. The options are exercisable for one share of Sakal’s common stock. Pancino’s and Sakal’s separate net incomes for the year are $100‚000 and $80‚000‚ respectively. Required: Compute the amount of basic and diluted earnings per share
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CHAPTER 22 EARNINGS PER SHARE Assignment Assistance Schedule Topic and Estimated Solution Time No. Topic Time* E22-1 Basic EPS calculations: multiple choice 20 E22-2 Calculating fully diluted EPS: multiple choice 40 E22-3 Fully diluted EPS: multiple choice 20 E22-4 Analyze the capital structure; average shares; compute EPS 20 E22-5 Analyze the capital structure; average shares; compute EPS 20 E22-6 Compute EPS for three years; stock dividend and split 15 E22-7 Analyze the
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19 Share-Based Compensation and Earnings per Share True / False Questions 1. GAAP requires using intrinsic value accounting for employee stock options. True False 2. If previous experience indicates that a material number of stock options will be forfeited before they vest‚ the fair value estimate of the options on the grant date should be adjusted to reflect that expectation. True False 3. Compensation expense must be adjusted during the service period to reflect changes in
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1. What are at least four depreciation methods that are available to a company? There is the Activity Method‚ Straight-line Method‚ Sum-of-the-Years’-Digits Method and the Declining-Balance Method. 2. What are the similarities and the differences? The Activity Method‚ which is also known as the variable charge or units of production method. With this method‚ we consider the productivity and not the passage of time. The life of the asset is considered by the output and the input. There
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Depreciation Methods Depreciation is the accounting process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset. Factors Involved in the Depreciation Process 1. What depreciable base is to be used for the asset? 2. What is the asset’s useful life? 3. What method of cost apportionment is best for the asset? Depreciable Base for the Asset The base established for depreciation is a function
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From: Subject: Depreciation Value of your Special Purpose Machine Date: Congratulations on your purchase of this special purpose machine. With every purchase of a new machinery comes the depreciation value of the machine. In order to report the value of this machine‚ we first must figure out the total amount paid for your machine. It says here you purchased the machine for an invoice price of $1‚200‚000 and the freight cost was $6000 and the cost for installation was $64000. We would add
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Differentiating Depreciation Methods Straight-line method of depreciation is where the depreciation is charged as long as you have an asset. However‚ an accelerated method of depreciation is where the depreciation that you have charged the amount will decline over a period of time. In straight-line method in order for you to get the depreciation amount the asset is subtracted from its cost. In the mean time‚ accelerated method is charged in the beginning of the life time but in the end it
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RICS Valuation Faculty The Depreciated Replacement Cost Method of Valuation for Financial Reporting Valuation Information Paper 10 Produced in association with Valuation Information Paper No. 10 The DRC Method of Valuation for Financial Reporting Acknowledgements RICS would like to thank Kingston University School of Surveying for their help in preparation of this Paper. Extracts from the ‘International Valuation Standards 2007’ are reproduced in this publication with the permission
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Sum of the Years’ Digits Method of Depreciation Sum of the years’ digits method of depreciation is one of the accelerated depreciation techniques which are based on the assumption that assets are generally more productive when they are new and their productivity decreases as they become old. The formula to calculate depreciation under SYD method is: SYD Depreciation = Depreciable Base × Remaining Useful Life Sum of the Years’ Digits In the above formula‚ depreciable base is the difference between
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