Solution-What amount should be reported as basic earnings

What amount should be reported as basic earnings per share

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Reference no: EM133179266

Question - AWM Company reported the following capital structure at year end:

Ordinary Share Capital 110,000 shares

Convertible noncumulative preference share capital 20,000 shares

10% Convertible Bonds Payable P2,000,000

Share options to purchase 20,000 shares at P15 were outstanding. Market Price of AWM share was P22 at year-end and averaged P 20 during the current year.

No value was assigned to the share options. The entity paid the annual dividend of P5 on the preference share.

The preference shares are convertible into 40.000 ordinary shares. The 1096 bond are convertible into 30,000 ordinary shares.

The net income for the current year is P750000 and the income tax rate is 35%

Required -

1. What amount should be reported as basic earnings per share?

2. What is the total number of potentially dilutive ordinary shares?

3. What amount should be reported as diluted earnings per share?

Reference no: EM133179266

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What amount should be reported as basic earnings per share

Reference no: EM133179266

Reference no: EM133179266

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