Answer:
Explanation:
The preparation of the statement of stockholders' equity at the end of the year is presented below:
Apex Systems Co.
Statement of stockholders' equity
For the fiscal year ended December 31, 2016
Particulars Common Stock
Beginning
Balance $1,340,000
Add: Net income $356,000
Less:
Bart Nesbit, Drawing -$91,200
Ending balance $1,604,800
There was a rise in human population.
I think it might be true, I’m so sorry if I’m wrong
Answer:
d) EPS cannot be calculated if a company has no preferred stock.
Explanation:
The above statement is untrue about E.P.S because the reason why 'Preferred dividend' (which is dividend on preference shares) is subtracted from Net Income, before being divided by the 'Average Number of Common Shares Outstanding' is for comparability.
Since the denominator is based on 'common shares' or 'ordinary shares', it makes sense not to include the part of income that has fallen to preferred shares.
As a matter of fact there are a lot of companies that do not have preferred stock and still report Earnings Per Share on their financial statements.
Finally, still on comparability; E.P.S helps to compare the performance of big companies that have preferred stock with small companies that do not have. Hence EPS can be calculated even when there is no preferred stock.
Answer:
Option B, an overstatement of net income, is the right answer.
Explanation:
Option “B” is correct because when the prepaid expenses occur then it is recorded in the balance sheet on the asset side and the cash will be reduced by the same amount. However, if the prepaid expenses have not been adjusted then it will show the overstatement of net income because cash has been gone so actual cash will be lower than the recoded cash. Thus, option B is right.
