Which of the following items would not be included in a basic earnings per share calculation?...
Which of the following items would not be included in a basic earnings per share calculation?
Select one:
a. undeclared dividends on cumulative preferred stock
b. undeclared dividends on noncumulative preferred stock
c. declared dividends on noncumulative preferred stock
d. declared dividends on cumulative preferred stock
Homework Answers
In Calculation of basic earning per share Dividend on preferred stock should be deducted from net income
Formula : Basic earning per share = (net income-Preferred dividend)/Share outstanding
So if preferred dividend is declared then in both situation cumulative or not preferred dividend would be deducted from net income
But when preferred dividend is not declared then only cumulative preferred stock would be deducted from net income in calculation of earning per share
So answer is b) undeclared dividends on noncumulative preferred stock
Add Answer to:
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