The Following Information Is Available for Bradshaw Corporation and Newell

question 115

Multiple Choice

The following information is available for Bradshaw Corporation and Newell Corporation: $$\begin{array} { | l | c | c | c | c | } \hline { \text { (in millions) } } & { \text { Bradshaw Corporation } } && { \text { Newell Corporation } } \\\hline & 2017 & 2016 & 2017 & 2016 \\\hline \text { Preferred dividends } & 25 & 10 & 0 & 30 \\\hline \text { Net income } & 500 & 480 & 490 & 520 \\\hline \begin{array} { l } \text { Shares outstanding at the } \\\text { end of the year }\end{array} & 200 & 180 & 150 & 200 \\\hline \begin{array} { l } \text { Shares outstanding at the } \\\text { beginning of the year }\end{array} & 180 & 150 & 200 & 220 \\\hline\end{array}$$ Based on this information, which of the following is suggested by the earnings per share calculations (rounded to two decimals) and the information given?

• A)There is lower performance in 2016 than in 2017 for Newell Corporation.
• B)There is higher performance in 2016 than in 2017 for Newell Corporation.
• C)There are fewer earnings available to Newell's common stockholders in 2017 than in 2016.
• D)There is a decrease in preferred shares of stock in 2017 as compared with 2016.

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Definitions:

Unrealized Loss

A loss that results from holding onto an asset that has decreased in price, but has not actually been sold for a loss.

Available-For-Sale Securities

Financial assets that are intended to be sold in the short term, not held to maturity, and are recorded at fair market value.

Market Values

The present rate at which a service or asset is available for purchase or sale on the market.

Adjusting Entry

An accounting entry made in the journals at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.