Reference no: EM132901220
Grapes Company had 200,000 ordinary shares, 20,000 5% convertible, cumulative preference shares, P100 par and P1,000,000 of 10% convertible bonds outstanding during 2021. The preference shares are convertible into 50,000 ordinary shares. During 2021, Cup paid dividends of P1.20 per share on the ordinary shares. Dividends on the preference shares remain unpaid for two years including the current year (2021). Each P1,000 bond is convertible into 100 ordinary shares. The profit for the year was P1,200,000 and the income tax rate was 30%
Problem 1: How much is profit attributable to ordinary shareholders or the numerator for basic EPS calculation?
Problem 2: How much is profit attributable to ordinary shareholders or the numerator for diluted EPS calculation? Assume the convertible preference and bonds are dilutive in nature, hence considered in the calculation of diluted EPS.
Problem 3: What if in the above, the entire bond issue were converted on June 30, 2021, how much is profit attributable to ordinary shareholders for diluted EPS calculation?
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