EXPLANATION(816)(5) = $4,080. $4,080 / $8 = 510 SHARES. 816 − ..

510.Explanation(816)(5) = $4,080. $4,080 / $8 = 510 shares. 816 − 510 = 306 new shares or [(8 − 5) / 8]816 = 306.

Question #65 of 90

Question ID: 414174

A company has convertible preferred stock outstanding. In the computation of diluted earnings per share, common shares issuedwhen convertible preferred stock is converted are added to the denominator of the basic EPS equation, and the numerator is:ض A)adjusted by adding back convertible preferred stock dividends.غ B)adjusted by adding back non-convertible preferred stock dividends.غ C)not adjusted.If convertible preferred stock is dilutive, the preferred dividends that would not have been paid if the preferred stock is convertedmust be added back to the numerator. Note that any nonconvertible preferred stock dividends are still subtracted from net incomein the numerator.

Question #66 of 90

Question ID: 414190

How will dilutive securities affect earnings per share (EPS) when determining diluted earnings per share?غ A)Increase EPS.ض B)Decrease EPS.Either decrease or increase EPS depending upon if the security is dilutive or antidilutive.Dilutive securities such as convertibles and options are found in a complex capital structure and always decrease EPS.Convertibles and options may also be antidilutive, which will increase EPS hence the name antidilutive. The only way to know if asecurity is dilutive or antidilutive is to compare the basic EPS to diluted EPS. If the diluted EPS is higher than the basic EPS thenthe security is antidilutive and should not be included when determining diluted EPS.

Question #67 of 90

Question ID: 414223

Barracuda Corporation, a U.S. corporation, owns a subsidiary located in Germany. The German subsidiary's financial statementsare maintained in euros. If the euro recently appreciated relative to the U.S. dollar, how would the unrealized translation gainaffect Barracuda's retained earnings and total stockholders' equity?Retained earnings Total stockholders' equityNo effect No effectIncrease Increaseض C)No effect IncreaseUnrealized foreign currency translation gains and losses are not reported in the income statement; thus, retained earnings areunaffected. However, unrealized foreign currency gains and losses are included in comprehensive income. Comprehensiveincome includes all changes in equity except those that result from transactions with shareholders. So, the translation gainincreases stockholders' equity by increasing comprehensive income.

Question #68 of 90

Question ID: 414170

An analyst has gathered the following information about Zany Corp.Net income of $200,000 for the year ended December 31, 2004.During 2004, 50,000 common shares were outstanding.Zany has 10,000 shares of 7%, $50 par convertible preferred stock outstanding, each convertible into two shares of common.