Reference no: EM132963785
Problem 1 - On January 1, 2019, Carol 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 2018 or 2019.
On March 1,2020, prior to the issuance of the financial statements for the year ended December 31, 2019, the entity declared a 100% share dividend on ordinary shares.
Net Income for 2019 was P7,500,000.
What amount should be reported as basic earnings per share?
A. 35.50
B. 37.50
C. 17.75
D. 18.75
Problem 2 - Cynthia Company had a net income of P15,000,000 for the current year. The following appropriations have not been considered in this amount:
Arrears of cumulative preference dividend for 2 years 4,000,000
Ordinary dividends 5,000,000
Preference share premium payable on redemption 1,000,000
Exceptional profit, net of tax 4,000,000
The entity had 3,000,000 ordinary shares of P1 par value outstanding at the beginning of the year. The following share transactions occurred during the current year:
January 1 Issued at P5 per share, P1 paid to date and entitled to participate in dividends to the extent paid up 250,000
April 1 Full market price P3 per share issue 600,000
July 1 Purchase of own shares 400,000
What amount should be reported as basic earnings per share?
a. 4.85
b. 4.57
c. 3.64
d. 3.94
Problem 3 - At the beginning of current year, Carl Company had 480,000 P60 par value ordinary shares and 100,000, 10% P100 par value convertible cumulative preference shares outstanding.
The preference shares are convertible into 100,000 ordinary shares before share dividend and share split.
During the current year, the following transactions affected the ordinary shares:
February 1 Issued 120,000 shares
March 1 Issued a 20% share dividend
May 1 Acquired 100,000 treasury shares
June 1 Issued a 3-for-1 split
October 1 Reissued 60,000 treasury shares
The net income was P35,000,000 and the entity did not declare dividend on preference shares.
What amount should be reported as diluted earnings per share?
a. 15.22
b. 17.17
c. 14.79
d. 16.67
Problem 4 - At the beginning of current year, Clara Company had 200,000 ordinary shares outstanding. On same date, the entity had issued 4,000 convertible 10% bonds with P1,000 face amount.
The bonds were converted on October 1 and 40 ordinary shares were issued in exchange for each bond.
Net income was P5,000,000. The income tax rate is 20%.
What amount should be reported as diluted earnings per share?
a. 14.47
b. 21.65
c. 14.72