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2 years ago

When a corporation has both preferred and common stock outstanding, earnings per share is computed by dividing net income

Business

1 answer:

vodka [1.7K]2 years ago

5 0

Answer:

D) less preferred dividends by weighted average of common shares outstanding.

Explanation:

When you want to calculate earnings per stock, you will do it for common stocks, not preferred stock. Therefore the dividends paid (or payable) to preferred stockholders must be deducted from net income, and then you divide net income by common stocks outstanding to get earnings per stock.

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Advances in technology have reduced the cost of manufacturing MP3 players if demand does not change

Andrews [41]

Because MP3 players cost less to make, if demand does not change, there will be more profit. This is because there would be the same amount demand and less money being made into making the product, meaning less expense, which means a bigger profit.

5 0

2 years ago

The Morris Corporation has $350,000 of debt outstanding, and it pays an interest rate of 8% annually. Morris's annual sales are

Vinil7 [7]

Answer:

8.14 times

Explanation:

The computation of the Time interest earned ratio is shown below:

As we know that

Times interest earned ratio = (Earnings before interest and taxes) ÷ (Interest expense)

where,

Earnings before interest and taxes = Income before income tax for the year + Interest expense

But before tha, we need to do the following calculations

The interest amount is

= $350,000 × 0.08

= $28,000

The net profit is

= $1,750,000 × 8%

= $140,000

The EBIT is

= Profit before tax + interest expense

= $140,000 ÷ (1 - 0.30) + $28,000

= $200,000 + $28,000

= $228,000

And, the interest expense is $28,000

So, the TIE ratio is

= $228,000 ÷ $28,000

= 8.14 times

3 0

2 years ago

Dividends in arrears are dividends on A. cumulative preferred stock that have been declared but have not been paid. B. non-cumul

Romashka [77]

Answer:

The correct answer is letter "A": cumulative preferred stock that have been declared but have not been paid.

Explanation:

Dividends in arrears are dividends that have not been paid in a period on cumulative preferred stock. A company does not necessarily have to pay dividends to its shareholders but the payment becomes cumulative. Under this situation, it is said that the organization has failed to generate enough cash during the year. Besides, there must be a dividend declaration for the dividends in arrears to be liable recognized.

7 0

2 years ago

The Capital Purchase Program carried out under TARP represented an attempt by the federal government to increase the capital of

4vir4ik [10]

Answer:

A. To keep banks with falling asset values solvent.

Explanation:

When a bank is failing it will result in loss of funds not only for the bank but also for customers that have accounts in these banks.

If a bank eventually closes operations as a result of insolvency, they will not be able to pay off the customers. That is where the deposit insurance comes in to settle customers.

The government will have to spend a lot of money reimbursing customers their money.

To avoid this the federal government ensures the capital of banks is maintained to keep banks with falling asset values solvent.

7 0

3 years ago

Which accounting principle dictates whether the cost of a repair should be expensed?

vodomira [7]

Which accounting principle dictates whether the cost of a repair should be expensed?

d. matching

As per matching concept, All revenues have to be recorded along with expenses incurred to earn those revenues. Thus, revenues need to be accounted.

8 0

3 years ago