Test2 - Test 2 Name: _ Accounting 3312 Row: Instructions:...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Name: ___________________ Accounting 3312 Row: Instructions: You are to do the 3 problems (1-3) or you may omit one of the problems of your choice and do in its place the 11 multiple choice problems. Do not do all, I will only grade the first three attempted. 1. A convertible bond issue should be included in the diluted earnings per share computation as if the bonds had been converted into common stock, if the effect of its inclusion is 2. Dilutive convertible securities must be used in the computation of A) basic earnings per share only. B) diluted earnings per share only. C) diluted and basic earnings per share. D) none of these. 3. In the diluted earnings per share computation, the treasury stock method is used for options and warrants to reflect assumed reacquisition of common stock at the average market price during the period. If the exercise price of the options or warrants exceeds the average market price, the computation would A) fairly present diluted earnings per share on a prospective basis. B) fairly present the maximum potential dilution of diluted earnings per share on a prospective basis. C) reflect the excess of the number of shares assumed issued over the number of shares assumed reacquired as the potential dilution of earnings per share. D) be antidilutive. Use the following to answer questions 4-5: Oliver Company purchased $400,000 of 10% bonds of McGee Co. on January 1, 2008, paying $376,100. The bonds mature January 1, 2018; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Oliver Company uses the effective- interest method and plans to hold these bonds to maturity. Page 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/27/2012 for the course ACCT 3312 taught by Professor Staff during the Spring '08 term at Texas A&M University, Corpus Christi.

Page1 / 7

Test2 - Test 2 Name: _ Accounting 3312 Row: Instructions:...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online