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Describes the effect that the item has on the company

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Reference no: EM132962603

The senior accountant at Draper Inc calculated the company's earnings per share ("EPS") for the current year at $2.45 per share. Upon review, the controller discovered that the accountant's calculation did not include the 2-for-1 stock split that was declared on the common share in the year

Problem 1: Which statement correctly describes the effect that this item has on the company's EPS for the current year?

Option 1: Current EPS is corrected stated since the item was correctly incorporated in the calculation
Option 2: Impact cannot be determined based on facts provided
Option 3: Current EPS is overstated
Option 4: Current EPS is understand
Option 5: Item has no impact since it is irrelevant in EPS calculation

Reference no: EM132962603

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