What amount should be reported as basic earnings per share

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Reference no: EM132804998

Questions -

Q1. On December 31, 2020, Flamingo Company had 500,000 ordinary shares issued and outstanding, 400,000 of which had been issued and outstanding throughout the year and 100,000 of which were issued on October 1,2020. The net income for the year was P5,100,000. What amount should be reported as basic earnings per share?

a. 10.10

b. 12.75

c. 12.00

d. 11.35

Q2. On January 1, 2020, Blue Company had 200,000 ordinary shares and 100,000 4% P100 par value cumulative preference shares outstanding. No dividends were declared on either the preference or ordinary shares in 2019 and 2020. On February 10, 2021, prior to the issuance of the financial statements for the year ended December 31, 2020, the entity declared a 100% share split on the ordinary shares. The net income for the year was P7,500,000. What amount should be reported as basic earnings per share?

a. 35.30

b. 37.30

c. 17.75

d. 18.75

Q3. Megastar Company provided the following information in relation to the share capital during the current year:

January 1 Shares outstanding 1,250,000

April 1 Shares issued 200,000

October 1 Treasury shares purchased 100,000

December 1 Issued a 100% share dividend

What is the number of weighted average shares?

a. 2,700,000

b. 2,775,000

c. 2,750,000

d. 1,350,000

Q4. Word Company had 600,000 ordinary shares outstanding on January 1 of the current year. During the year, the entity issued rights to acquire one ordinary share at P10 in the ratio of one new share for every 4 shares outstanding. The market value of the ordinary share immediately prior to the rights issue is P35. The rights were exercised on October 1. The net income for the current year is P8,550,000. What amount should be reported as basic earnings per share in the income statement?

a. 11.40

b. 12.00

c. 14.25

d. 13.41

Q5. On January 1 of the current year, Pareno Company had 300,000 ordinary shares outstanding, P100 par or a total value of P30,000,000. During the year, the entity issued rights to acquire one ordinary share at P100 in the ratio of one share for every 5 shares held. The rights are exercised on March 31. The market value of each ordinary share immediately prior to March 31 was P160. The net income for the year was P6,000,000. What amount should be reported as basic earnings per share?

a. 17.14

b. 16.67

c. 18.75

d. 17.39

Reference no: EM132804998

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