During 2013, M Co

question 1

Multiple Choice

During 2013, M Co. had the following two classes of stock issued and outstanding for the entire year: • 400,000 shares of common stock, $1 par.
• 2,000 shares of 4% preferred stock, $100 par, convertible share-for-share into common stock.
M's 2013 net income was $1,800,000, and its income tax rate for the year was 30%. In the computation of diluted earnings per share for 2013, the amount to be used in the numerator is:

• A)$1,792,000.
• B)$1,796,000.
• C)$1,800,000.
• D)$1,802,400.

Understand the concept of total return from an investment, including income and capital gains yields.

Perform break-even analysis on investments after experiencing gains and losses.

Understand how to calculate income yield from an investment.

Understand how to calculate capital gain yield from an investment.

---

Definitions:

Goodwill Impairment

A reduction in the book value of goodwill, which occurs when the carrying amount of goodwill exceeds its fair value, indicating that the asset is not as valuable as previously thought.

Reporting Units

Segments or components of a business for which discrete financial information is available and reviewed by the operating segment's management.

Equity Method

An accounting technique used by a company to record its investment in another company, where the investment's value is adjusted in accordance with the investee's performance.

Partial Equity Method

An accounting method used for investments, where the investor recognizes its share of the investee's earnings, but adjustments are less comprehensive than under the full equity method.