Question : 65.National Corporation was organized January 1 and issued 600,000 shares : 1259490

 

 

65.National Corporation was organized on January 1 and issued 600,000 shares of common stock on that date. On July 1, an additional 200,000 shares were issued for cash. Net income for the year was $3,675,000. Net earnings per share amounted to:   

A. $5.25.

 

B. $6.13.

 

C. $4.59.

 

D. $9.19.

 

 

 

66.On January 1, 2015, Carleton Corporation had 55,000 shares of $6 par value common stock outstanding. On March 31, 2015, Carleton issued an additional 10,000 shares in exchange for a building. What number of shares will be used in the computation of earnings per share for the year 2015?   

A. 55,000.

 

B. 65,000.

 

C. 62,500.

 

D. 62,000.

 

 

 

67.On January 1, 2015, Ole Corporation had 75,000 shares of $8 par value common stock outstanding. On July 31, 2015, Ole issued an additional 10,000 shares in exchange for a building. What number of shares will be used in the computation of earnings per share for the year 2015?   

A. 75,000.

 

B. 80,000.

 

C. 79,167.

 

D. 85,000.

 

 

 

68.It would be reasonable to assume that:   

A. Basic earnings per share should exceed diluted earnings per share.

 

B. Diluted earnings per share should exceed basic earnings per share.

 

C. Basic earnings per share should be equal to diluted earnings per share.

 

D. Basic earnings per share would not be presented with diluted earnings per share.

 

 

 

 

69.Diluted earnings per share is a hypothetical computation to warn stockholders what could happen if:   

A. Loss contingencies turn out adversely.

 

B. Convertible securities are converted into shares of common stock.

 

C. Extraordinary losses were to recur.

 

D. Consideration was given to the loss from operations discontinued during the current period.

 

 

 

 

70.When a company reports both diluted earnings per share and basic earnings per share:   

A. Basic EPS would be greater than fully diluted EPS.

 

B. Basic EPS would be less than fully diluted EPS.

 

C. Basic EPS may be either greater or less than fully diluted EPS.

 

D. Both should never be shown – only one or the other would be reported.

 

 

 

 

71.Which of the following would not be used in computing diluted earnings per share?   

A. Preferred stock.

 

B. Convertible bonds.

 

C. Stock options.

 

D. Weighted-average number of shares of common stock outstanding during the year.

 

 

 

 

72.On January 1, 2015, Edward Corporation had 10,000 shares of $6 par value common stock and 10,000 shares of 8%, $100 par value convertible preferred stock outstanding. The preferred shares carried a 3 for 1 conversion privilege. On October 1, 2015, all of the preferred shares were converted to common. What number of shares must Edward use in computing basic earnings per share at December 31, 2015?   

A. 17,500.

 

B. 40,000.

 

C. 7,500.

 

D. 10,000.

 

 

 

73.For the current year, Voque Company reported basic earnings per share of $8 and diluted earnings per share of $3. The difference between these figures is attributable to outstanding shares of convertible preferred stock. If all this preferred stock had actually been converted into common stock at the beginning of the current year, Voque Company would have reported only one earnings per share amount, which would have been:   

A. $8.

 

B. $5.

 

C. $3.

 

D. Cannot be determined.

 

 

 

 

74.On January 1, 2015, Alice Corporation had 20,000 shares of $6 par value common stock and 10,000 shares of 8%, $100 par value convertible preferred stock outstanding. The preferred shares carried a 3 for 1 conversion privilege. As of December 31, 2015, none of the preferred shares had been converted. What number of shares must Alice use in computing diluted earnings per share at December 31, 2015?   

A. 10,000.

 

B. 20,000.

 

C. 30,000.

 

D. 50,000.