Q2. The following information was extracted from the Statement of Financial Position of Carman Berhad as at 31 December 2018. 7% cumulative preference shares 2,000,000 issued and outstanding of RM100 each ordinary shares 22,000,000 issued of RM1 each treasury shares 2,000,000 5% convertible bond are RM10,000,000 worth of bond convertible into 2,000,000 ordinary shares stock options 1,000,000, each to purchase one ordinary share at RM25 per share warrants 2,000,000, each to purchase one ordinary share at RM15 per share Average market share price RM20 Average warrant price RM10 Net profit RM36,000,000 Tax rate is 24% Required: (a) Compute the basic earnings per share. (b) Taking into account dilutive effects above, compute the diluted earnings per share.

Q2. The following information was extracted from the Statement of Financial Position of Carman Berhad as at 31 December 2018. 7% cumulative preference shares 2,000,000 issued and outstanding of RM100 each ordinary shares 22,000,000 issued of RM1 each treasury shares 2,000,000 5% convertible bond are RM10,000,000 worth of bond convertible into 2,000,000 ordinary shares stock options 1,000,000, each to purchase one ordinary share at RM25 per share warrants 2,000,000, each to purchase one ordinary share at RM15 per share Average market share price RM20 Average warrant price RM10 Net profit RM36,000,000 Tax rate is 24% Required: (a) Compute the basic earnings per share. (b) Taking into account dilutive effects above, compute the diluted earnings per share.

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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2. Following in the Balance Sheet of Navrang Co. Ltd., as on 31st December 2020. Share Capital: 3000 5% pref. shares of *100 each 6000 Equity shares of 100 each 6% Debentures Bank Overdraft Creditors Goodwill Land & Buildings 3,00,000 Machinery 22,500 3,00,000 4,50,000 Stock 65,000 6,00,000 Debtors 70,000 1,50,000 Cash 7,500 1,50,000 Profit and Loss Account 75,000 Preliminary expenses 3,50,000 10,000 1275000 1275000 On the above date the company adopted the following scheme of reconstruction. i) The preference shares are to be reduced to fully paid shares of *75 each and equity shares are to be reduced to shares of 40 each fully paid. ii) The Debenture holders took over stock and debtors in full satisfaction of their claims. iii) The fictitious assets are to be eliminated. iv) The land and buildings to be appreciated by 40% and machinery to be depreciated by 30%. Give Journal entries incorporating the above scheme of reconstruction and prepare the reconstructed balance sheet. 20 was as…
1. What amount should be reported as basic earnings per share for 2017? 2. What is the total number of potential ordinary shares? 3. What amount should be reported as diluted earnings per share for 2018?
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Based on the following information, what is the market weight of common stock/market weight of preferred stock/market weight of bonds (long-term debt) Given: Source of capital Common Stock Preferred stock 155,000 shares Bonds ($1000 par value) 190,000 bonds 31%/5%/64% 60%/9%/31% # shares or bonds outstanding 1.9 million shares 35%/12%/53% 85%/7%/8% Mkt Price $48.00/share $102/share $985 per bond
Problem: Earnings per Share. (Pls help and provide supporting computations)