1. Earnings per share is calculated before accounting for which of the following
ID: 2570195 • Letter: 1
Question
1. Earnings per share is calculated before accounting for which of the following items? a. Preference dividend for the period. b. Ordinary dividend. c. Taxation d. Minority interest 2. Ordinary shares issued as part of a business combination are included in the EPS calculation in the case of the "purchase" method from a. The beginning of the accounting period. b. The date of acquisition. c. The end of the accounting period. d. The midpoint of the accounting year. 3. Dilution of EPS is defined in IAS 33 as a. A decrease in earnings per share when any financial instrument is converted to any form of share capital. b. A decrease in share capital. c. A decrease in earnings per share when convertible instruments are converted to ordinary shares. d. A decrease in earnings per share when share capital is converted to debt capital. 4. Which of the following is not an example of potential ordinary shares? a. Financial liabilities that are convertible into ordinary shares. b. Share options. (c) Contingently issuable shares. (d) Cancelled treasury shares.Explanation / Answer
As per the chegg's policy I am allowed to answer only the first 4 parts of a question so please don't mind and ask other questions separately.
1. Correct option is B I.e. ordinary dividend, because the net earnings to ordinary shareholders are calculated, hence ordinary dividend is not included.
2. Correct option is B since the shares issued would be taken on an weighted time basis of the date of acquisition.
3. Correct option is C since dillution of EPS is change in earnings after the convertible shares are converted.
4. Correct option is D since cancelled treasury shares can't be converted to ordinary shares.
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