The generally accepted accounting principles of the United States
Answer:
a) diluted earnings per share = 0
Explanation:
Diluted earnings per share (DEPS) is a recalculation of the basic EPS. The difference between DEPS and EPS is, EPS represents the current position of earnings per share. No changes in number shares and/or earnings in the future are incorporated in the basic EPS.
Whereas DEPS is a representation of not only the current position of earnings and shares but also includes the commitments an entity has already made whose occurrence may result in an increase/decrease in the amount of earnings and/or number of shares. For example, in the question Culver Company has issued 10-year convertible bonds which right now have no impact on basic EPS but if in the future these bond holders exercise their right of conversion, this would result in an increase in number of ordinary shares hence decreasing/diluting the basic EPS. The entities use DEPS to show shareholders the impact of such commitments on the basic EPS to improve their decision making.
So in 2017 none of the bonds were converted therefore no diluted earnings per share is calculated in 2017.
If all of the bonds were converted in 2017 the DEPS would have been calculated as follows:
The formula for calculating DEPS is as follows;
DEPS = (Net income + interest savings) ÷ number of ordinary shares + increase in ordinary shares as a result of conversion.
Tax savings as a result of conversion=$128400 ($2140000×6%). Because if bond holders convert into ordinary shares then Culver company will not have to pay them interest and hence the amount of interest is saved.
Increase in ordinary shares upon conversion= 29960 ($2140000÷$1000=2140 bonds. Each bond is convertible into 14 shares therefore, 2140×14=29960).
Now Lets calculate DEPS as follows;
DEPS = ($296000+$128400) ÷ 91000+29960
DEPS =$424400÷120960
DEPS = $3.5
Answer:
Just-in-time inventory management
Explanation:
Just-in-time or JIT is an inventory management approach that encourages the purchase of materials only when they are needed in the production process. The JIT approach eliminates the need for storing large quantities of material for future productions. The acquisition of materials is aligned with the production process.
By adopting JIT, a business saves on inventory costs as materials are not purchased in bulk. Wastage that results from the storage of material is also eliminated. The success of JIT depends on management ability to forecast sales accurately and working with reliable suppliers.
Answer:
Uh, of course I'm not at work! I brutally broke my back. Ouch.
