Explain how convertible securities are determined to be potentially dilutive common shares and how those convertible securities that are not considered to be potentially dilutive common shares enter into the determination of earnings per share data.
Convertible securities are viewed as possibly dilutive protections when their change would diminish profit per share.
Convertible securities are viewed as possibly dilutive protections when their conversion would decline profit per share. On the off chance that the present circumstance doesn't result, change isn't assumed, and just fundamental EPS is accounted for.
On the off chance that the present circumstance doesn't result, transformation isn't accepted, and fundamental EPS is reported.
On January 1, 2017 (the date of grant), Lutz Corporation issues 2,000 shares of restricted stock to its executives. The fair value of these shares is $75,000, and their par value is $10,000. The stock is forfeited if the executives do not complete 3 years of employment with the company. Prepare the journal entry (if any) on January 1, 2017, and on December 31, 2017, assuming the service period is 3 years.
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