000,000.EXPLANATIONEXPLANATION

1,000,000.Explanation

Question #57 of 90

Question ID: 414175

Zachary Company's warrants issued in 2000 are Zachary's only outstanding potentially dilutive security. In 2005, EPS andDilutive EPS differed for the first time. A possible explanation for the change is the:غ A)year-end market price of Zachary increased.غ B)average market price of Zachary decreased.ض C)average market price of Zachary increased.An increase in average market price could cause Zachary's warrants to go from antidilutive to dilutive. If the average price of thestock increases during the year, the warrants are likely to be exercised at some point during the year. Neither of the other choiceswould do this.

Question #58 of 90

Question ID: 460644

A company changes from an incorrect method of accounting to an acceptable one. Which of the following statements about thischange is most accurate?It is a change in accounting principle and is reported below the line net of taxes.ض B)It requires restatement of any prior period results that are presented in the current financialstatements.غ C)It is an unusual or infrequent item and is reported in net income from continuing operations.This is the correct treatment of this change. The company must disclose the nature of the error and its effect on net income andrestate any prior period results that are presented in the current financial statements.

Question #59 of 90

Question ID: 414125

As of the beginning of the year HalfPass Productions, Inc., had the following complex capital structure: