n entity reported the following information on January 1, 2016: ordinary share capital, P10 par, 800 000 shares 8 000 000 preference share capital, P50 par, 50 000 shares 2 500 000 12% bonds payable 5 000 000 the preference share capital is 10% cumulative and convertible into 100 000 ordinary shares. dividends on preference shares are in arrears for 2 years. the 12% bonds are convertible into 80 ordinary shares for each P1 000 bond. unexercised share options to purchase 90 000 ordinary shares at P20 per share were outstanding at the beginning and ending of 2016. the average market price of the ordinary share was P30 per share and the market price on December 31, 2016 was P40 per share. May 1 Issued 60,000 ordinary shares at P25 per share July 1 Purchased 100,000 ordinary shares at P15 to be held as treasury Oct 1 Converted bonds with face amount of P2,000,000 Dec 31 The net income for 2016 was P5,000,000. the tax rate is 30% 1. What is the amount of basic earnings per share? a. 6.02 b. 5.26 c. 5.72 d. 5.42 2.What is the total number of potentially dilutive ordinary shares at the beginning of year? a. 530,000 b. 500,000 c. 590,000 d. 560,000 3. What is the amount of diluted earnings per share? a. 5.52 b. 4.20 c. 4.07 d. 3.97
an entity reported the following information on January 1, 2016:
ordinary share capital, P10 par, 800 000 shares 8 000 000
12% bonds payable 5 000 000
the preference share capital is 10% cumulative and convertible into 100 000 ordinary shares. dividends on preference shares are in arrears for 2 years. the 12% bonds are convertible into 80 ordinary shares for each P1 000 bond.
unexercised share options to purchase 90 000 ordinary shares at P20 per share were outstanding at the beginning and ending of 2016. the average market price of the ordinary share was P30 per share and the market price on December 31, 2016 was P40 per share.
May 1 Issued 60,000 ordinary shares at P25 per share
July 1 Purchased 100,000 ordinary shares at P15 to be held as treasury
Oct 1 Converted bonds with face amount of P2,000,000
Dec 31 The net income for 2016 was P5,000,000. the tax rate is 30%
1. What is the amount of basic earnings per share?
a. 6.02
b. 5.26
c. 5.72
d. 5.42
2.What is the total number of potentially dilutive ordinary shares at the beginning of year?
a. 530,000
b. 500,000
c. 590,000
d. 560,000
3. What is the amount of diluted earnings per share?
a. 5.52
b. 4.20
c. 4.07
d. 3.97
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