11.If an employee fails to exercise a stock option before its expiration date, the company should decrease compensation expense.
12.If an employee forfeits a stock option because of failure to satisfy a service requirement, the company should record paid-in capital from expired options.
13.If preferred stock is cumulative and no dividends are declared, the company subtracts the current year preferred dividend in computing earnings per share.
14.When stock dividends or stock splits occur, companies must restate the shares outstanding after the stock dividend or split, in order to compute the weighted-average number of shares.
15.If a stock dividend occurs after year-end, but before issuing the financial statements, a company must restate the weighted-average number of shares outstanding for the year.
16.Preferred dividends are subtracted from net income but not income before extraordinary items in computing earnings per share.
17.When a company has a complex capital structure, it must report both basic and diluted earnings per share.
18.In computing diluted earnings per share, stock options are considered dilutive when their option price is greater than the market price.
19.In a contingent issue agreement, the contingent shares are considered outstanding for computing diluted EPS when the earnings or market price level is met by the end of the year.
20.A company should report per share amounts for income before extraordinary items, but not for income from continuing operations.