What is the total number of potential ordinary shares

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Reference no: EM132543958

Point 1: Hanzel Company had 200,000 ordinary shares, 20,000 convertible preference shares, and 5,000,000 of 10% convertible bonds outstanding during the current year.

Point 2: The preference shares are convertible into 40,000 ordinary shares.

Point 3: Each 1,000 bond is convertible into 5 ordinary shares.

Point 4: During the current year, the entity paid dividends of 20 per share on the ordinary shares and 40 per share on the preference shares.

Point 5: The net income for the current year was 8,000,000 and the income tax rate is 30%

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

a. 40.00

b. 35.00

c. 16.00

d. 36.00

Question 2. What is the total number of potential ordinary shares?

a. 40,000

b. 65,000

c. 45,000

d. 60,000

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

a. 36.00

b. 33.56

c. 31.51

d. 30.19

Reference no: EM132543958

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