COMMERCE 3AB3 Chapter 4: ch4 cont Word doc.docx
11 Mar 2015
School
Department
Course
Professor
Document Summary
The computation of basic eps is usually straightforward. Net income minus preferred dividends (available to common shareholders) is divided by the weighted average share outstanding during the year to arrive at eps. To compute the weighted-average number of shares outstanding, the following computation is made: Assuming net income available for common shareholders is ,000 then the basic eps = Statement of retained earnings a summary disclosure of the changes in the balance of the. Retained earnings account from the beginning to the end of the year. Net income increases retained earnings, and a net loss decreases retained earnings. Both cash and stock dividends decrease retained earnings. Retroactively applied changes in accounting principles and corrections of errors may either increase or decrease retained earnings. Appropriated retained earnings may be reported separately from unrestricted retained earnings when such a condition exists due to a contractual requirement or a board of directors" policy. Plus or minus prior period adjustment (net of income tax)
