What is the number of incremental ordinary shares

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Problem - Montana Company had 200,000 ordinary shares outstanding on January 1. In addition, as of January 1, the company had issued 4,000 convertible 10% bonds with P1,000 face value. The company has no other potentially dilutive securities. The bonds were converted on October 1 and 40 ordinary shares were issued in exchange for each bond. Accrued interest on the bonds was recognized and paid on that date. Net income for the year was P5,000,000. The income tax rate is 35%.

1. What is the basic earnings per share?

2. What is the number of incremental ordinary shares?

3. What is diluted earnings per share?

Reference no: EM132953152

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