AAA Company had the following share capital at the end of the reporting period: Cumulative preference share capital, P100 par, 50,000 shares outstanding, 10% dividend rate, each share convertible into 2 ordinary shares 5,000,000 Ordinary share capital, P50 par, 500,000 shares authorized, 200,000 shares outstanding 10,000,000 The entity reported net income of P5,400,000 for the current year. No share capital activity took place during the year. The income tax rate is 30%. The preference share was issued in the prior year at par value. Questions: 1. Compute for the basic earnings per share. 2. Compute for the diluted earnings per share.
AAA Company had the following share capital at the end of the reporting period: Cumulative preference share capital, P100 par, 50,000 shares outstanding, 10% dividend rate, each share convertible into 2 ordinary shares 5,000,000 Ordinary share capital, P50 par, 500,000 shares authorized, 200,000 shares outstanding 10,000,000 The entity reported net income of P5,400,000 for the current year. No share capital activity took place during the year. The income tax rate is 30%. The preference share was issued in the prior year at par value. Questions: 1. Compute for the basic earnings per share. 2. Compute for the diluted earnings per share.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
AAA Company had the following share capital at the end of the reporting period:
| Cumulative shares outstanding, 10% convertible into 2 ordinary shares |
5,000,000 |
| Ordinary share capital, P50 par, 500,000 shares authorized, 200,000 shares outstanding |
10,000,000 |
The entity reported net income of P5,400,000 for the current year. No share capital activity took place during the year. The income tax rate is 30%. The preference share was issued in the prior year at par value.
Questions:
1. Compute for the basic earnings per share.
2. Compute for the diluted earnings per share.
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