[Anonymous]

I’m rewriting only a few areas I feel will most likely be tested on the exam…I’m currently rewriting the SCF section…

according to the NINJA notes, Cash paid for the acquisition of Trading securities are included in both Operating and Investing activities…I thought they were only supposed to be included in Operating activities.

They can’t be included in both…so???

[Anonymous]

i need some clarification on this:

For EPS purposes, treat C/S stock splits or stock

dividends as if they occurred at the beginning of the

year, regardless of when actually issued during the

year

1/1: 20,000

2-for-1 split 4/1: 20,000

Shares issued 7/1: 10,000

Average C/S for EPS purposes: 45,000 (20k+20k+5k)

shouldnt the correct answer be:{[(20,000 + 20,000 (9/12)] / 2} + 10,000 (6/12)

which equals 22,500

[Anonymous]

hey there cpa066729!

First of all, it doesn't look like you're calculating the Weighted Average Common Stock Outstanding (WACSO) correctly…

In your example WACSO would be calculated as follows:

1/1 – 6/30: 40,000 (2 for 1 stock split included) x 6 months/ 12 months = 20,000

7/1 – 12/31: 50,000 (new outstanding balance) x 6 months/ 12 months = 25,000

20,000 + 25,000 = 45,000 = WACSO

EPS = (NI – P/S dividend)/WACSO

I hope this helps!

[Anonymous]

hey there cpa066729!

First of all, it doesn't look like you're calculating the Weighted Average Common Stock Outstanding (WACSO) correctly…

In your example WACSO would be calculated as follows:

1/1 – 6/30: 40,000 (2 for 1 stock split included) x 6 months/ 12 months = 20,000

7/1 – 12/31: 50,000 (new outstanding balance) x 6 months/ 12 months = 25,000

20,000 + 25,000 = 45,000 = WACSO

EPS = (NI – P/S dividend)/WACSO

I hope this helps!

[Anonymous]

in the question, it says the stock split was on 4/1 not 6/1, thats why i multiplied by 9/12 instead of 6/12

[Anonymous]

in the question, it says the stock split was on 4/1 not 6/1, thats why i multiplied by 9/12 instead of 6/12

[Anonymous]

When we retrospectively account for the 2for1 stock split the 40,000 is only multiplied by 6mo./12mo…because then the total amount outstanding stock changed on 7/1 by the extra 10,000 issued.

it doesn't matter when the 2 for 1 stock split occured because we pretend like it happened 1/1.

[Anonymous]

When we retrospectively account for the 2for1 stock split the 40,000 is only multiplied by 6mo./12mo…because then the total amount outstanding stock changed on 7/1 by the extra 10,000 issued.

it doesn't matter when the 2 for 1 stock split occured because we pretend like it happened 1/1.

[Anonymous]

lol, i got it, my mistake was dividing 2 instead of multiplying by 2 for the stock split. doh!

thanks

[Anonymous]

lol, i got it, my mistake was dividing 2 instead of multiplying by 2 for the stock split. doh!

thanks

[Author]

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