Calculation of the EPS

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Question - Pristine Resources Company, (PRC), a privately held company with widely traded bonds on the open market and with a December 31, year-end had the following items and issues pertaining to its 2020, year-end. Assume all amounts provided are material to the operations of PRC.

Required - Respond to each item as its treatment/reporting in the financial statements for 2020 and, if required, provide related accounting entries. If it is a disclosure/presentation issue, indicate the proper classification on the Statement of Financial Position.

The VP Finance recognizes the importance of earnings-per-share (EPS) reporting and is asking you to clarify a few points regarding EPS. Her staff has performed some preliminary calculations for the year just ended. She asks you the following questions to which you reply.

a) We have several instruments that could result in preferred shares being issued if they were exercised.

b) Do you think all of our convertible instruments enter in to the calculation of the EPS?

Reference no: EM132847450

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