6: Inthe computation of weightod average shares ou ‘when thers isa share epithe additonal haves ace Wolke y the ter fae xan weed By hs member of ee ocaning Sete tle a: earliest year reported. ida pose 7. Undedard prefaonc den re deducted from ast income in the earnings per shart computation for whi type of preference shares? nies Soe a. Noncumilative b. Cumulative ¢ Neither cumulative nor noncumulative 4. Both cumulative and noncumulative 8. In computing basic earnings per share wthon there are cumulative preference shares, what is the amount that should be deducted from net income? Berea dvdende ina eorence dividends pid during the year ¢. Annual preference dividend a4 4. Preference dividends deciared during the yar 9, Whatis the correct treatment of a share dividend iseued in mid-year when computing the weighted average number of ordinary shares outstanding? ‘. The share dividend should be weighted by the length of time that the additional shares are outstending. 1 ‘The share dividend should bo incuded in the weighted average numbor of shares outstanding only if the ‘additional shares result in a decrease of three percent tr more in earnings per share. &. ‘The share dividend should be weighted es if the additioral shares were issued atthe beginning f the year 4, The share dividend should be ignored since no ‘Additional capital was received. 2032 CHAPTER 29 DILUTED EARNINGS PER SHARE TECHNICAL KNOWLEDGE ‘Fo define diluted earnings per share. To identify potential ordinary shares. ‘Ao distinguish dilutive and antidilutive secirites. “To. know the formula in computing diluted earnings per share in relation to convertible bonds payable, convertible preference shares ‘and share options or warrants 1583 3FIntroduction ‘When the capital structure ofan entity is simple in the sonse that it consists only of ordinary share capital and onconvertible securities, the eompatation of the earnings per share is relatively eney. ‘The net income minus the preference dividends is sim, dlicided by the numberof erdinory shores outstanding of Ip the average shares outstanding, whichever is oppropriate But where the capital tructure of an entity is complex in ‘the sense that it consists of ordinary shares and potential ordinary shares or potential diluter, the computation of the ‘earnings per share becomes a litle complicated. Potential ordinary share A poteitial ordinary share is « financial iistrument or other contract that may entitle the holder to ordinary shares. In other words, s potential ordinary share is 4 financial Instrument that represents fature issuance of ordinary ‘The threc major types of potontial ordinary shares are: ‘a. Convertible Yond payable b. Convertible preference shere ¢. Share option and warrant 1034 Dilution and antidilution Dilution arises when the inclusion of the potential ordinary ante iecreases the basic earnings per shar or increases amet erent Te cass oe poten orinay ‘heer are dicive secures Cn th oer hand odin grin whan eels of ie oon oiary hares Frees In tia case, the potential ordinary shares are considered 25 Gnllditaticé and therefore ignored in computing diluted Diluted earnings per share “The computation of the diluted earnings pér share is based fon the "as if scenario: “As if he convertible bond payable ia converted into ‘ordinary share 1. "he i the convertible preference share is convert ita, ordinary share. Ani the sine pions and waranis areca, Tn other words, the computation of te diated ersings per Tattered on ube sumption chat adienl otiary Shae ete teak ol coneecion of converte samy ean eerie of sare options thersbytoeeaine __ the numberof ordinery shares and consequently creating & lution inthe base earnings per share. Convertible bond payable “The computation of diluted eaaings per share esses that The bond payable i concerted ince ordinary share. : ‘Accordingly, adjustments shall be made both to net income odo te umber of ordinary shores outsionding. ‘The net income is adjusted by adding back the interest {xpenve on the bond payable, net oft. “The numberof ordinary shares outstanding is increased by {he mur of ordinary abares that would have Ben issued tipon conversion af the bond payable ess. xTilustration An entity had the flowing securities outatandin ieinning of the current yur coe 10% convertible bonds payable, neh PL, ¢C0 bend tooverl nto 10 orion caer 4.0nc00 ‘Onna hae capita F100 pa, 25000 sae ‘sete 10,00 shares aaed 1900000 Nite . 009000 acme te ox Basic earings per share Net inns 209.00 Dirdebperdinayshireoculientionding HCO. ascearsngspertaze 2 Diluted earnings per sliare Ne ine s00ng00 ‘Bai trea expnte on onde parable oman sono aete@os 0000 © iahen _ 234000 Adjusts Easo00 Ordinary shar scully otanding ron ‘Reseda! eric hare ou orverin offend payable (008 10) 40000 009 ‘Toca rdinary shares Diluted BPS_ (280.0001 140,000) Observe that if e conversible bond payable is outstanding during the entie year, itis assumed that the conversion takes place the beginning ofthe ye 1088 a Bond payable istued during the year vez thatthe conver bad paoblis sued on A apps th comer meng Toftee cura Yt, nth ony om Apr tw Desir Slatin current ys: the diluted enrnings per share would be aodified incon so0noo0 ‘Bae reretepease on bonds parable ‘acooboe oman) soon Insowe tx (002900000 ($0009 _21no0 10000 jeceaa rine carn Fone eas aes oa ie cane ee 4 Mec a ip a Satie pas eat sarees BE eeeey mea oom oe snoay pd oe ere ‘ eee oSaceet ieata So amrenaercees, wa, =e Papen ik a ee Basie earnings per share ansary 1 Outing ‘Oucher I ooverea (4000 4029/12 Averageurinary shares Basic EPS (Soon c00/240000) 1stDiluted earnings per share Januniy 1 Outetanding ‘Octber 1 Conversion 000 40) ‘otal ordinary shares ‘The issuance of ordinary shares on Oct “averaged” anymore because the convert ‘outstanding on January 1. Net income : $5000.00 Interest on bonds net of ax fv Jensaey 1 october 1couo0oxIONESNIZE TON) | _ 219000 Aajurted income : 521000 Divideby oninty shares 350000 Diduted BPS Ma ‘The after-tax actatl interest pal on the bonds up to the ate of conversion is added back to net income Convertible preference share TE there is convertibla preference dhare, the computation of diluted earnings pe share alo assumes that the preference share is converted into ordinary share. ‘Accordingly, the net income'is not reduced anymore by the famount of preference dividend. ‘The number of ordinary shares oustanding is increased by the number of ordinary shares that would have been isued ‘upon conversion ofthe preference share. Mlustration 10% conver cums perature ih er, 9.000 saree ~ gue preference share ICemmveribl ints teoordory hares 000200 ‘Orinary care capi P100 par, 250,000 hares horned, 10.000sbaresusueé 9000.00 Net inom om Basic earnings per share Net ince 000500 Preteen dividend (10% x3000000) Coenen Adjosedizce 70000 Binds yoda shares actualy outonding coco Desicearsings pe share Diluted earnings per share Netinlone soneca rain sars cso room rina tae igh conversa ‘petarnn har 2000023 ‘etal ordinary shares ied PS (6000000/ 160000 0 Obcerve thatthe conversion is eagumd t be made at the beginning of the year becnese th converse preference share is outstanding during the entre Joa Preferciice share issued during the year Ifthe convertible preference share is innued on September 1of the current year, the conversion computation wiloaly be for four moths, fin September 1 Deceber 91 ef he -eurront year Computation Netieose Ordinary share salty using ‘Aifued maori hares hugh covers tpreernce thas (0.0004 2" 60,0008 1) ‘Tetalerdinay shares ited BPS (6000,000/ 120,00)dag? lustration~ Preferonce shares actually converted ‘An entity had the following securities outstanding at the beeing of th curont yer Preference thre capital 10%, 5,000sbre, tPcopas cuscave and conereMe tats Toots srinaystane 009000 rainy share cai, $0.00 eare utberard, 200006 hareineed, P80 par 10000000 salnseme forthe ‘ceauoco ‘The preference shares were all ednverted into ordinary ‘hare on Ootober 1 of the current year. ‘The preference dividends forthe entire year were paid in il Before the contersion. Basic earnings per share Quetanng OGRE Coors (100000%8/1) Averagertnay hae Netinose, reference tvded (10%: 5,000.00) tine t ordinary hares Basic BPS (4$00000/225,000) Note thatthe preference dividends are deducted from net Tpcome becaure the preference dividends were paid in fall Hloweve, if the preference dividends were not pad before tbe sctualeonefson it meane that no preference dviends srl ever te paid tecaut the preference shares are alreedy [etually converted lato ordinary shares In ach ace, chobasc earnings pr share would appear es flows: Diluted earnings per share naar LOutstandion ‘etoer 1 Converse ‘etalon shares 1 invonce of exdnary shares on Ostiber 182 To fnuane ot ae tbe eomveile etree hares ave outstanding on January 1 Ne insie iad EPS (4000000900000) ‘beth the preference dividends mere paid of not before {eracual conversion, che ited araings per share would be the eam el ‘Options and warrants ‘Share options are granted 1s employees enabling them ‘> Styuire ordinary shares of the entity at specie price uning a coins pad of Une. Share worronte ace granted to shareholders enabling thes, tp acquire ordinary shares of te esty at a specied price ‘uring a defiite perio of time. By definition’ options and warrants have so eath yield but ‘they derive their value from the Hight to otsin ordinary Shores ats speided price that is tavally er thar the Droviling markit prize Options and ws ‘option price is less then the ove ordinary share Hever for employe share options, the exercise prise or ‘plon pre thalLnlade the ovals of ane saris be ‘ippled tothe entity tn the future under the opis ple. _ 108‘Treaniry share mothod ptiens and warrants ere ini inthe BPS computation ‘rout the reory share mata aa Hover, this don ot imly thatthe enty hes entired intr ranacon fo puree rary she ‘Th trenury share methane to spi ie compaion gXinsemenal ein haa it etn ob we fecha constrain ar re of ops and waren The following procedures shall bo followed in the ‘computation of incremental ordinary shares arising oss Issues of options tod waren {The options and warrants ee essumed tobe exercised ‘a th date they ‘re iseued during the cuest year, 1 The proceeds from the enn ofthe optons and Sando se welced by uh sce ny, “Bier Serge mark The number tinerdalantnas shea sequal to th pln sharsa ni tbe aud nosy shares accel, ‘The incremental ordinary shares represent the jase of ‘pa cousderaiion— srdinay shares for Accordingly, thee are the potential ordinary shares that ‘re inlede in the computation of diluted earnings per share, ‘Tho assured proceeds fom th options and warrants shall ‘conser to have bron retired fom isu of ohafes at ‘ie val or average sake pie we iusteatfon et ine ‘Sriary sbare capi P10 per, 109500 eharee Boployestarecnsene Option eerage actin ee er 3 Basic earats per share ess amas eee aunioaatyeatg — Sia asic earaingpeslare 2 Dit enennes i abare te ie soe Option shares 00 Pe sete 2 Seckedecmetonin | * ania Rabies oe tenceleeny a ae “Plea conch cope ‘D iene i a ie pn po ols nt Net tat See tac opto in wort St a sooo v | ile %Options issued during the year ‘Note that if the options are outstanding during the entire ‘Jon, these are assumed tobe oxeraed atthe beginning of the curent year. If eke options are isrued on March 1of she current year {he inemeatal ordinary sbares would be for ten wont ot 3ONZof 12,000 share, oe 10000 shares. scm, the diluted earings per share would be revised Netiocone sonano Oninary care scully xstandlng om06 “fasemesal ordinary shares (24000 10/32) agin "Tualordnarytharet aad Dilelet EPS (60000007 118000) ss Nera s,hebsceinge pr hr ld ‘Actual exercise of options and warrants) ‘a Th option shares or covered shares actually issued 5° re oreed rom the date of exercise tothe end of the current year: ; bh Theiseremental ordinary shares ae “averaged” fro Tee ening ofthe eurent yar tothe dteofercte of options and worrents. Mlustiation Netinome 00009 Seren, one morodaee* 0 8 SMG : 09 aps 2 ‘suse no valu ia esined tothe share options 2 Apel i iy exert. O2 St the currest year, the options are ac {hls data the mavket pie of ordinary share 8 F250. ama Baste earnings per share Neteroe son nin het oneaniog nay 1 Ona, 9a 1 een ensa) Et mn uieRis (on0m0"122399 as Diluted earnings per sharé isoome _Ssvoion ui in aare ‘an Bist 2 Proud fon runfeerae pne “cso opin sare 00 San ey tsi. 00250 gam « Tecate ares Tasca Jeu io ps2 Wiha everes nent eat “Note that the market pric’ on the "date of actual exese™ AMScPis computing the assumed tearary shares. ths coo, he market prizes P60 on Api 1 which the dete of exerci ‘diary hare cul Guttanting: ‘anaary 1 Outtanding 1 Baarceclabare ops 090003932) ‘ghd average lnsenecial eae al at PS (6.90400 125.50 ta Ve lee 106 WCDiluted loss per share ‘An entity proved dhe lowing ta for the current yaar Neti (s00000) Ondisary shareceiteh Pooper, 10n000ehree ‘ro. 0 Preference capita P10 pu. 10M erate, 1200 shares coverbl am 4.00 rooney 2000000 Basic loss per share . Neth { soa) referees didnt 102000000) (aia “Telia ogdinay arbre (amon Dindetyordineyhaeracualy oustanding. 10000 Basic proba Cy sore that the preference odend is odded tothe net Ar pet att rn shel eae Diluted loss per share ele cov, Ordinary barely tata 109600 ‘Aeon ordinary shares ured voghcintericn ‘of pear bree agin ‘eterna shazer so Dial pears (4003.000/140,0%) am COtserve thatthe diluted lee por share is lower than the ice per care i be entity sana ous only the basic loss per share is dodreported. Thea heres thesame rhe eda shore ba nal pl nsmore ‘The reaua i that the potential ordinary shares would alway decrease the loss per share and there(or the tet othe sarumed eonverdon i always antidiutive. 1046, Questions 1 structure and 1. Distinguish between simple ea complex capil stare. 2 Define a potatal rdinary share 1. What are the three major types of potenti) erdinary shares? ~ ‘Deine iain and atten 5. Distinguish ive and antdlutive securities. 4. Belai the treme of convertible bond payable in foumpung ued earings per share “1 Bapain the triaimest of convertible preference share ‘neomputing Alead uring per share. {Define share pions and share warrant. 9 Bxplain the treasury share method of cor {peremental oll: + 30-Tplan luted lot per aha, we dePROBLEMS Problem 20:1 (ACP) Lone Company roperted the following at year-end Bonds pare -10% pe Lora Criiary caret, PLCOpar, c0osaree _' Soanoon Neioswe ‘rane ‘The bods are exavertle into odiary shires ia dhe ratio of 10 erdinary shares foreach P1,00 oad. To income tax ‘ate e904 ‘Required: 1. Basic earing per share 2 Diluted earnings per shire Problem 20.2 (ACP) HanterCompay had the following share capital atthe end of reporting peed. Cie ptr har pt P10, “aon cure oananding, 10% dade exch ‘Steerer it ornare ‘609000 ndings capa Ppa, 6,00 ars 10,0000 or 800 hares outage [No share capt activity tok place duving the year. The prference shave was ined inthe pio ear at par value ‘The entity pote net income of P5,400,000 forthe eure ‘jar and the income tax rate 30%. + Required: 1. Basic earings por share 2 Diluted earnings per share 1048 Problem 79-3 (AA) iver Compa sued 72 000,000 17 bonds pec accra meets (hded December 31,2017 mee average nusber of ordinary shares gutstanding was 1.00 share and th ace faz rte SOK, 1 Rais edalgy et tare 2 ite earings yr sare, 2 4p Problem 264 GAA) Simple Company pevvided the following informaticn on Sasa 1, BM Onna sarap. ren, w0geOsbaree.- 10000000 ‘tots paras afc aie, saa Pte nar 29 tate 4000000 on April 3, 2017, honda wit fae amount of P0000 were (aly converted into erinary share 2.300.000 ad the ‘The wt nso for he erent ear w {bese tx rate 0%, 1. Basi erage por share Ve 2, Died earaings per share 15.7? 14s tt_/rvbtem 298 aris) ASpstace Gomacy ad made ut pt ttt louy sar Fo ata ‘December $1, 2017. mare ee oa err 10400 eka se tan Ee genet ‘Since January 2017 thre hd eon P80 10% convertible uring the ‘Tag terms of conversion for every P4000 nominal amount ema, es a FEBSY narod Se aS Mose rig ig pl ei ee Peoe ee acre I Ocoee Sanne eae. ee Cane Bas rng pr hare P08 £ Dine cater petian. Oy, He & oe Fesieasse gent! faye ae (hy Grape pred nt ini P7460 fr 0 “eet ptt ony ths ud wer 60000 share oploaslasued ce Jansery 1, 2017 each exerciatle SErone share a Pod Tow far aur leash share option i PIO. ‘Two hundred thourand ordinary shares were outstanding ing 2017 ‘he average market rd the ear wa PS por share sand the share maskel pe on Dao 3, 2017 was PO, Required: Basic earnings per hare 37:50 2 Dili cance per tse 2291 1060 pti or eee he re ee eee eae Rabetcenp trees ott plang et ct a i Slee kaya ei ee we a os ha we et ees Son : St gate csc pair acu Ting cot "The increta ae a 908. ‘Ther ar 1400000 orinary shares outstanding ring the creat yeu “The pricede from the sane of he bonds re loca cables aha compat samme Eqacrearoet ese ‘Tajrowets + onan Required: 1. Ble eaaings per hare 1 Diluted erage por share os 4s | iProblem 288 (ACP) (On January 1, 2017, Complex Company bad * Sagem lx Cospany bad the flowing tong renin 100g, 0004 aa seein Socata OM ces (On Avr 01, the enya 2900 hire oto to gulgee lowing hema putas ow adnsey ans flat ptm ot FSO. The kr a coho pn ‘Bp neater a Diecasascraget The at nef he euret ns was 78,0000 Required: i 1. Bis camings er shace + 2 Dilted araingn per sare 37 ¥Problem 289 (ACE) Winter Company bd the foring at ait nJaiary He ot ep in scum ox tym Suc tt Ruchita aie alse Bch Malt beaten raat (Beg terre at inno 5 500000 he eat onion Required: 1 Basi earnings per ahare 2 Dilute carnage per share 3°77 082 reams GPA Ade) tan Sept viel sonata vent ing ta same cl tS Bee eg siraakearonm tt Ey en do pis nl? Dyer ator Probleim26:1 (AICPA Adapted) ‘Dsiae’Compeny be 20000 rdnry shares with P20 par ‘aloe ead 26,000 shares of P100 par, OX cusulative, ‘Gaver prefrence share epital outstanding fr the Saale eae ye Bick rfc sai over it xin share ‘ieee ne ee was PD. het ancunt pl yep ed earings per ant 220 : 1088 | |Problem 20.12 AA) ot Gompay ad 1000 eany sare uttanig in ada, on January 1, 201, the ety ha ened 31000, area cumultve 8% pairanc hares wil P100 pe, ‘These peferenco shares were converted oa September 1 {OY Bac preference sae as eget oriary ‘Te prtrence dividends fr te ate Fear mat pid ‘ll bere the conversa oe “Tae enity bas no other potently dstive wcarien The ‘et incae forthe ear wes P2000 000 1. What amoust shouldbe separa an base earnings er hart Tek 22000 ae A 2. What anus shoal be report a utd earings per ‘hare? Qxe is © leas a iss 084 Sages otaanng Ox Orbe ‘Problem2018 (AICPA Adapted) 1, Wil Company ad $0,000 odinry 2 eer 247 eon 20008 inary shan were aed fr cs > 74.0000 o % exaere rade Ta ae tar 1 fo curr iat 100000 disry shares ‘The cari onda are letting oo Dsener 3, ma ‘Wt inthe suber of shares that shonld Be ted i pling ltd crags pee aba fr fe yer ended (Op Jenuary 1, Somber, 2077 ee 0000 te 600000, es 0 ‘ratoo Problem 20:14 (AA) lak Comp be 2.500000 oioas hare cua Sitncag' Bvt As aan 80000 ednary shares (Oo Oetoer 2 2017, nent isaed § 600 19% avertbie ‘odo fice ant of P1000 pet Bnd. Bach teed vere ine 40 orisary abeProblem 29.18 (AICPA Adapted) fe 30,2016 Lemon Company iad 200, 1400, 7% ‘onde at par value ‘een converil ate 200 ‘ep at par val Bat bo ble nto 2 On January 2, 2017, 100,040 ordinary shares tse. The bende conve he Wns ob uly 1, 2017, ice ‘hs itoms atten theca yd sowed daca of PSL gba Th eer nO | What moot sib pia td aang er 0d & tebe 2 a 5 Problem 29-16 (AICPA Adapted) (eden 1,507 ex Campa bad 600 ordinary sacs uttanting On Ape, 2017, a eon 150000 onan ‘hares wer nud eck tty ale had 5,000,000 BX convertible bonds The ite 150,00 odiary utstanding ding 201 ‘hare The tone oe ae nds word rceveda elise dng Wats the inert de wed in computing Aste earings per hae be 30177 int wv: 086 Problem20:17 0AM) teoie Cony revel the fling inrsation a the ecining ef the cet ar nny starycopl Popes tonoaoabrs 8000 mereateimedntinemesth ay cht May 1 toned 6000 rary sit fr FOO pr share fd 5 Bhan 0.0 tn a oy | oc. 1. Coinisd 3.001000 fee amount of boa ‘Dee Si Net aoe ein ear wat P5000, Toe ta oe 11 What amount should be reported as basic earnings per, ough aE B88 al], oe + oe «ent nt pd mi ’ od te We ee + 1087 vGg ‘Problein 20.18 (AA) artune Cnapany had 300,00 ordiny shares otnding agusuary 207 Iran ogden 2017 ea ‘ndsued 000 converte 104 bonds with F000 ace sua The nity hada oter potas ‘hebonds were converted a October 207 and Worn ‘aise wee ineod im eschange ech Bnd ‘Acrocd interest ox the boos wad recognized nd paid on anne ‘The ntiacons the yar was 5, 000000. Te not me naon Si wrt hd etd ed irr oe Préblem 29.19 GAA) (0p Jenuzy 3, 217, Kats Company bud $0000 ornay reer On Gxt, an etn 100.000 ‘liuystaee wer ned a edo, thn wot Bad P20,00800 of 6X converte adapted January, 2017 exert ato 325000, riinyshse No Pond were coed 017. ‘Tenet acon fa the year was P6000 and the facie erate wanio ‘What ean hol be eprad n i easnen pr are? & te it ‘Problem’9.20 (AICPA Adapted) ety ld woud sare vara pace ‘asst erat Is per sar caning ote ‘Fon avgage mart pee the rtnary sary wos 720 dieing eget th fasta of date tit pete ded earaaes per sac ld beaten Problem 20.21 (AA) Cora Company bad 100000 etizary shares custaning ‘Sreedhar he Same eee eradicate eng of area es, th ea tad Egat pleat sized elope 2 purcane (Abn cesar “Th opin exerci ri PLO pe ear. The average sare meeayareabs "Te enty bad a tbr pty tive etna. The inne fag the our we 200900, Wont meen shold be repel vated earning ser sare ag °2 ieProblem 2922 (IAA) ‘Toe average share price he yar was P20. The shar ‘ten tt opon cence ate do Ape, 217 wae Pe ‘he ety ha no che peeiy dutve vce ‘et iboms e uer vac PAO me 1, What amos aia be rout bans darnings per 2 ar ‘2199 ; 1 Wat unt oad breaded etaog per g frist or) te Sey a eg ae Schieber ERSRE? esd eet 0 ey Spergeler gic peter ict SEE Feciasraeseng mes ite Ditka eeninoe tin ur vuriton “Wat oun sdb opted cang esha? Problem624 CAA) Conta Company provid the Eloring data fr 204: pear see ee Ed uw Jey 1217, thre mre pins exendig eke treo Et per sa ‘Ther tre dri er 7 eae ‘in ety ped Pa. of 108 neocon Teed ter nore pected iopetiar eee 1 What at ae pred Ds eae per int a a0 fae. eet 3Problem 28.25 (AICPA Adapted) ile Company ebained the flong normatin o fhe enol si brie caer oe : ‘Manerefous oe ” ee = In addtio,ee entity had Snel 19000 cove share pms wil am cae poof PD the ema ed sine pra. ed be pid ated ering per Problem 28:26 (AA) (on Jay, 01, Jp Compary ima par 72,00 000 ‘at cml ond ach 3000 bond conver ito (econ sare Nota werecnverad urn the yar. ‘he antity Bad 200000, P00 par val rina shares nteaning dra the yor. “Te et iso forthe year was P6000 and the cone terrae wat 508 ‘Watanabe per tel amin er hart Ox ¥ sooo aan 1082 Pre jem 2927 Multiple choice (PAS 39) in nc inatren tatgiet Bler te ight pach ora se Waeraat retin RATES eee ino ony shares 2 Bij pin tn as meme ve Ey ofce an pre resin Toqeinag snes enay 4. Soot rangeeat mg Pegi edinary share inode al of be flowing, cree . | Pouca oi nstrenn ining ipa lubes hat are not convertible into ‘hares, : Share warts 5 SEG cpcons ond ota expe plas that allow epics ten sna stares a arf their ‘a Site nich woud be ue upon nition of ttn coldligs resulting fom cotractul ‘Sttoeneat ech fe puree boise 8 Optce end waren ae tie if 1 The eno oer an be eae tet pe Re coe pein han mee tm, hrc pot og te merge a Geog are mgs 9 a {ibn npviag the teary haze maid fr ated regs yr hare te sat pe ot tiny hare Mate rca he ed a the ee ‘Arca at pz a the ear See| ting dilute BPS, ite |. ‘cavers bone ppl sal ln computing diated PS, dvdends on convertible ‘uimalatve pretence sare sale & Ienoned TS Doduced frm oot apni, winter dca ont ‘cred ieee 1A writen pa opto ie 1s M'conteae shat gives the Buller the ght os edinay shares peed pe inven ets nate tates the ale he ee 1S puchee ednegy shane 44. Ae’ sgsvesont to Luan ordinary abere'that it ‘perleat ea testa opted ado. Wh ofthe iewing sates incorrect fhe tae pat ope tea hn oy? ‘2 Ramune duet he gaint th presen cy san il tod a verge alt pe {Sai fo prods ai the ctr 1 Tein ansmed tht the proved rom hein ae | ‘od fo buyback the edinay shares oyre ty the pine 4) Tieroling agers inary darted {Reonping cited ecg posure 4. The rv acest erin shares abl be {Gaaded in compting baste earings pete, 1064 29:28 Mokiple choles (FRS) t er pial edinacy sar ase pct iB tele - * Ooo die cae wns at ld penal ite bai SEEGERS os wise ss wProblem 29.29 Mulkiple choice (AA) 1. The ERS computation ati want ning en abe om assumptions sect fuze tamer of er Se i Bineding Es The purposed earings per thai fo fits cement er. sing ns «Ein pee tin va ag . Soares ‘tn cateitne dual warn pe hare, whch te ‘Boring shuld not be coir? 1 Tha weighed verge namr of rary shee nade declared op cumalative 4 When they are mile date overt scutes ‘Ge oo thu shoul be aed Hl tcl ited oings per Pare the essay wi toc an en brng vr erent ian carrie Fiance tate opdoe,toe sanded ree ctl fen pene 2. Wn compte PS era harmed Eva a te weet © teapbing teem shar eo feonps tat ‘otic ra npn etree ‘Shan pov of eriny she dug the eo» te ‘Sted pease poet RO he earnest pie higher than the =— 41 Mh ee average markt pie owe thas the endo | ot ze1 Added tack to the muro ae EPS water dectared oot 1 Deduct the mene fbn EPS oly © Aide back the meme fle BPS cab if 10. Antive ecaie ‘a Should he nce othe cspuatin of dtd ‘Solas pr abu tase cm por 1s fev tho rhe inn in wera per ere ‘Stunna welt cue tee ergs per hae (Set distal rams rst ish caer sn warts pn pee (tele e mwrcy marae it 4, Sinise cared nal Bt mpeton, Problem 830 1. aaog pe sh ag eps tb ince nent Mattiple choice (AICPA Adapted) BG pcede bent ‘The number lsum unig nt i en fee : ere tetas conn fb Rdtied ore : Tike cane fons inthe arp of Seater ar de ae oy with ne eat rte en et ‘Eetptcain elas ord arr each, ae Ain peter raat itn sae eget cae tt rte Pe ae aig el nko rot SES pen ton bt tty Wn te inher ine wdeing te ep wail erasry ses nox ening per sare