In Determining Earnings Per Share,interest Expense,net of Applicable Income Taxes,on

question 18

Multiple Choice

In determining earnings per share,interest expense,net of applicable income taxes,on convertible debt which is dilutive should be

• A) ignored for diluted earnings per share.
• B) added back to net income for diluted earnings per share.
• C) deducted from net income for diluted earnings per share.
• D) none of these.

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Definitions:

Straight-Line Basis

A method of calculating depreciation or amortization that spreads the asset's cost evenly across its useful life.

Accumulated Depreciation

The total amount of an asset's cost that has been expensed over time due to wear and tear, obsolescence, or age.

Residual Value

The projected sum an asset will fetch at the time of sale, once it has surpassed its lifespan.

Straight-Line Method

A method of calculating depreciation or amortization by evenly spreading the cost of an asset over its useful life.