May I ask for a solution and explanation to the problem for a better understanding. Thank you!14. Compute for the Price Earnings ratio for 2014 for Bittergourd.a. 12.30b. 11.32c. 11.23d. 13.21 15. Compute for the Earnings per share of ordinary share (common stock) for Bittergourd Company. a. 11.50b. 9.20c. 12.30d.10.60 BITTERGOURD CompanyIncome StatementFor the Year Ended December 31, 2014(in thousands of pesos)Sales (all on account).Cost of goods sold.Gross margin..Operating expenses..P 2,000(1,400)P 600(240)P 360(50)P 310(93)P 217......................................Net operating income..Interest expense.Net income before taxesIncome taxes (30%) ...Net income..BITTERGOURD CompanyStatement of Financial PositionDecember 31, 2014 and 2013(in thousands of pesos)Assets20142013Current assets:P 140P 130Cash and Cash equivalents..Accounts receivable, net..Inventory. .Prepaid expenses.1201101001105040Total current assets.P 410P 390Noncurrent assets:Plant & equipment, net.1,8401,830Total assets.P2,250P2,220Liabilities and Shareholders' EquityCurrent liabilities:Accounts payable.P 100P 100Accrued liabilities.8080Notes payable, short term...Total current liabilities .210230P 390P 410Noncurrent liabilities:Bonds payable...Total liabilities .460500P 850P 910Shareholders' equity:Preference share capital,P5 par, 5%.Ordinary share capital, P10 parShare premium - ordinary..Accumulated profits.Total shareholders' equity..Total liabilities & shareholders' equity..P 100P 100200200260260.....840750P1,400P2,250P1,310P2,220

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Answered: 15. Compute for the Earnings per share…

15. Compute for the Earnings per share of ordinary share (common stock) for Bittergourd Company. a. 11.50 b. 9.20 c. 12.30 d.10.60

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

May I ask for a solution and explanation to the problem for a better understanding. Thank you!

14. Compute for the Price Earnings ratio for 2014 for Bittergourd.

a. 12.30

b. 11.32

c. 11.23

d. 13.21

15. Compute for the Earnings per share of ordinary share (common stock) for Bittergourd Company.

a. 11.50

b. 9.20

c. 12.30

d.10.60

BITTERGOURD Company
Income Statement
For the Year Ended December 31, 2014
(in thousands of pesos)
Sales (all on account).
Cost of goods sold.
Gross margin..
Operating expenses..
P 2,000
(1,400)
P 600
(240)
P 360
(50)
P 310
(93)
P 217
.............
.........................
Net operating income..
Interest expense.
Net income before taxes
Income taxes (30%) ...
Net income..
BITTERGOURD Company
Statement of Financial Position
December 31, 2014 and 2013
(in thousands of pesos)
Assets
2014
2013
Current assets:
P 140
P 130
Cash and Cash equivalents..
Accounts receivable, net..
Inventory. .
Prepaid expenses.
120
110
100
110
50
40
Total current assets.
P 410
P 390
Noncurrent assets:
Plant & equipment, net.
1,840
1,830
Total assets.
P2,250
P2,220
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable.
P 100
P 100
Accrued liabilities.
80
80
Notes payable, short term...
Total current liabilities .
210
230
P 390
P 410
Noncurrent liabilities:
Bonds payable...
Total liabilities .
460
500
P 850
P 910
Shareholders' equity:
Preference share capital,P5 par, 5%.
Ordinary share capital, P10 par
Share premium - ordinary..
Accumulated profits.
Total shareholders' equity..
Total liabilities & shareholders' equity..
P 100
P 100
200
200
260
260
.....
840
750
P1,400
P2,250
P1,310
P2,220

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