中南财经政法大学：《中级会计学 Intermediate Accounting》课程电子教案（PPT课件讲稿，英文版）Chapter 14 Earnings Per Share And Retained Earnings

14 Earnings Per Share And Retained earnings ntermediate Accounting Accounting School. Zhongnan

14 Earnings Per Share And Retained Earnings Accounting School ·Zhongnan University of Economics & Law ntermediate Accounting I 中级会计学

1. Basic Earnings Per Share Net Income- Preferred dividends Weighted Average Number of Common Shares Outstanding

1. Basic Earnings Per Share Net Income – Preferred Dividends Weighted Average Number of Common Shares Outstanding Intermediate Accounting 14 Earnings Per Share And Retained Earnings

Weighted Average shares Since a corporation earns its net income over the entire year the earnings are related to the common shares outstanding during the year ee(

Weighted Average Shares Since a corporation earns its net income over the entire year, the earnings are related to the common shares outstanding during the year. Intermediate Accounting 14 Earnings Per Share And Retained Earnings

Weighted Average shares A corporation had 12,000 shares of common stock outstanding at the beginning of the year. On March 2, it issued 2, 700 shares; on July 3, it issue The nearest res, and on December 1, it reacquire whole month is sury stock Months shares Shares use d equivalent Are Outstanding Outstanding Whole units January-February 12, 000X 2/12 2.000 March-June 14.700x4/12 4.900 July-November 18.000 5/12 7,500 December 17520x l/12 1460 Total weighted average common shares 15,860

A corporation had 12,000 shares of common stock outstanding at the beginning of the year. On March 2, it issued 2,700 shares; on July 3, it issued another 3,300 shares, and on December 1, it reacquired 480 shares as treasury stock. Months Shares Shares Fraction of Year Equivalent Are Outstanding Outstanding Outstanding Whole Units x = January-February 12,000 x 2/12 = 2,000 March-June 14,700 x 4/12 = 4,900 July-November 18,000 x 5/12 = 7,500 December 17,520 x 1/12 = 1,460 Total weighted average common shares 15,860 The nearest whole month is used Intermediate Accounting 14 Earnings Per Share And Retained Earnings Weighted Average Shares

Weighted Average shares A corporation begins operations in January 2004, and issues 5,000 shares of common stock that are outstanding all during 2004. On December 31, 2004, it issues a 2-for-1 stock split Months shares Shares Fraction of Year equivalent Are Outstanding Outstanding Outstanding Whole units January-December 5000 X 12/12 5.000 The two-for-one split is retroactive to January 1 5.000 Total weighted average common shares 10000

A corporation begins operations in January 2004, and issues 5,000 shares of common stock that are outstanding all during 2004. On December 31, 2004, it issues a 2-for-1 stock split. Months Shares Shares Fraction of Year Equivalent Are Outstanding Outstanding Outstanding Whole Units x = January-December 5,000 x 12/12 = 5,000 Total weighted average common shares 10,000 The two-for-one split is retroactive to January 1 + 5,000 Intermediate Accounting 14 Earnings Per Share And Retained Earnings Weighted Average Shares

Weighted Average shares On may 28, 2005, the corporation issues 5,000 shares of common stock; on August 3, it issues a 20%o Stock dividend and on october 5. it issues 2.005 shares of stock 2004 Data on 2004 Statement Months shares Shares Fraction of Year Equivalent Are Outstanding Outstanding X Outstanding Whole units January-December 5.000 12/12 5.000 5,000x 200%x 120%=12,000 equivalent whole units Continued

On May 28, 2005, the corporation issues 5,000 shares of common stock; on August 3, it issues a 20% stock dividend; and on October 5, it issues 2,005 shares of stock. Months Shares Shares Fraction of Year Equivalent Are Outstanding Outstanding Outstanding Whole Units x = January-December 5,000 x 12/12 = 5,000 2004 Data on 2004 Statement 5,000 x 200% x 120% = 12,000 equivalent whole units Continued Intermediate Accounting 14 Earnings Per Share And Retained Earnings Weighted Average Shares

Weighted Average shares 2005 Data on 2001 Statement Months shares Sl hares Fraction of Year_ Equivalent Are Outstanding Outstanding ⅹ Outstanding Whole units January-may 10.000 June-July 15000 Issued 5.000 shares Issued 20% stock dividend August-September 18,000

2005 Data on 2001 Statement Months Shares Shares Fraction of Year Equivalent Are Outstanding Outstanding Outstanding Whole Units x = January-May 10,000 June-July 15,000 August-September 18,000 Issued 5,000 shares Issued 20% stock dividend Intermediate Accounting 14 Earnings Per Share And Retained Earnings Weighted Average Shares

Weighted Average shares 2005 Data on 2005 Statement Months shares Shares Fraction of Year equivalent Are Outstanding Outstanding Outstanding Whole units January-may 12,000 Increases 20%o June-July 18.000 Increases 20% August-September 18,000 October-December 20.000

2005 Data on 2005 Statement Months Shares Shares Fraction of Year Equivalent Are Outstanding Outstanding Outstanding Whole Units x = January-May 10,000 June-July 15,000 August-September 18,000 12,000 Increases 20% 18,000 Increases 20% October-December 20,000 Intermediate Accounting 14 Earnings Per Share And Retained Earnings Weighted Average Shares

Weighted Average shares 2005 Data on 2001 Statement Assumed Shares Shares Fraction of Year Equivalent Outstanding Outstanding Outstanding Whole Units January-may 12,000 5/12 5.000 June-July 18.000 2/12 3.000 August-September 18,000 xxxx 2/12 3.000 October-December 20.000 3/12 5.000 16.000

2005 Data on 2001 Statement Assumed Shares Shares Fraction of Year Equivalent Outstanding Outstanding Outstanding Whole Units x = January-May 10,000 June-July 15,000 August-September 18,000 12,000 18,000 October-December 20,000 x 5/12 = 5,000 x 2/12 = 3,000 x 2/12 = 3,000 x 3/12 = 5,000 16,000 Intermediate Accounting 14 Earnings Per Share And Retained Earnings Weighted Average Shares

2. Diluted Earnings Per Share A corporation with a complex capital structure is required to report two ar Yes... basic earnings Its ince per share and diluted earnings per share

2. Diluted Earnings Per Share A corporation with a complex capital structure is required to report two amounts on the face of its income statement. Yes… basic earnings per share and diluted earnings per share. Intermediate Accounting 14 Earnings Per Share And Retained Earnings