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21 Cards in this Set
- Front
- Back
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When accounting for convertible debt,
At conversion, bonds= basis can be: either |
a. either their book value
b. or their market value |
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When accounting for convertible debt,
Cost of induced conversions is a ______ expense. |
period
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When accounting for convertible debt,
Conversion is initiated by the _________ |
security holder
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Convertible preferred stock is classified as ______, unless it is _______.
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equity;
redeemable preferred stock |
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Conversion is an _______ transaction, hence, no basis for recognizing gain or loss
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equity
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At conversion, ________ value of the preferred stock is used
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book
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Stock warrants entitle the holder:
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to acquire additional shares
within a stipulated period at a specified price. |
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Stock warrants may be:
either |
detachable warrants, or non-detachable warrants
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Stock warrants are also known as...
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stock options
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If warrants are detachable, value of the warrants is determined by:
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either the proportional method, or
the incremental method |
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Stock warrants may be:
either |
detachable warrants, or
non-detachable warrants |
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Stock rights give existing shareholders
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preemptive rights to buy shares.
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When stock rights are issued ______ journal entries are made.
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No journal entries are made
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Compensation expense is determined as of
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the measurement date (usually the grant date.)
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Compensation Expense is allocated
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over the service period
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Dilution of EPS means
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reduction in EPS.
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Reduction in EPS results from
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potential conversion of dilutive securities into common stock
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Basic EPS:
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Net Income - Preferred Dividends /
Weighted Average Outstanding Common Shares |
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Dilution is
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the reduction in EPS, if securities, potentially convertible into common stock, are converted [assumed at beginning of the year].
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Two EPS amounts are important:
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1. Basic
2. Diluted |
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Complex structures have _________ that reduce earnings per share.
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convertible securities, options, warrants, or other rights
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