Answered: When calculating the 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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Question

Stang Ltd, which presents comparative 2011 and 2012 income statements, issued a 2-for-1 share split on December 31, 2012, increasing the number of ordinary shares from 5 000 to 10 000. When calculating the earnings per share for the 2012 financial statements, the share split is assumed to have occurred on:

Select one:

a. December 31, 2012

b. January 1, 2011

c. January 1, 2012

d. December 31, 2011

Expert Solution

Step 1

Share split is the split which has been made by the company in which the shareholders will get the more shares without paying anything to the company.

The share split is 2:1

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