5 ‘The features moet frequently atsosated with preference hares include al of the following, except ‘a. Callable at the option of the shareholder 1 Converible into ordinary shares © Nonveting 4. Proforonce as to assets in the event of Liguidation ‘The cumulative feature of praference shares ‘Limits the amount of cumulative dividends tothe par value ofthe preferonce shares tb Requires that dividends not pad in any your must be: & Means that tho sh preforence shares equal tothe par value of ordinary Ghares ae which tune the preference shares can be Goaverted into ordinary shares, ‘a. Enables a preference shareholder to accumilate dividonds equal to the par sue ofthe preference dividends in arrears Noncumul fa. Are not paid and not disclosed. 1B Mut be paid belore anyother eash di istibsted, ce. fre disloed as Liability uni pid Are paid to preference shareholders ifeulicent funds Temein after payment of the current preference Sividend scan be How should eumnilative preference dividends i arrears be reported? Note disclosure Increase in shareholder’ equity © Ineresse in current lables &. Ingreseeincurtens Ubi for the to be declared within the year and increase in oncurrent libiliis for the balance. soe CHAPTER 28 BASIC EARNINGS PER SHARE TECHNICAL, KNOWLEDGE ‘To define earnings per share. ‘To know the proper presentation of earnings per share. ‘To know the formula in computing basic earnings er share. To determine the weighted average number of ordinary shares. To understand the accounting treatment of share dividend, skare split and right issue in EPS computation. UeDesi jon of earnings per share ‘The earnings per share figure isthe aniount attributable to every ordinary share ouzatanding duriag the period. ‘Thus, the earnings pee share information pertain enly to ordinary share It is not necessary for preference share because there is a efinite rate of retura for such share. ‘The eotsputaion of earnings per share is covered by PAS 238 whih requtes two presentations of earnings per share, namely: ‘Basic earnings per share 1 Diluted cernings per chere ‘The presentation of earnings per share is required for: 4 Batis whose ordinary shares ‘ae publicly traded. be. Battos that are in the proms of issuing ordinary shares of potential erdlary share in the puis sesetn In other words, public entities are required to present earnings per share. Nonpublic enttiee are not required but are encouraged to ‘recent earnings per share. Presentation “Anentty shal preseat onthe face of the income statement ‘Die an dilted earrings pee share for income o ns fm ‘continuing oper ‘An entity that reports a disconsinued operation shall dlclose the basi 4nd dilued amounts per shar for the ‘iscontinued operation either on the face ofthe income ‘Statement or in the sos tothe eiatements, ‘An entity shall preset basic and diluted earnings per ehare ven if the amounts are negative, fr example, basi loss per share When an entity presents both consolidated fnazcs) Hatemente and separate financial statements, she ‘Eeclooures required bythe standard need be presented ‘only on the basis ofthe consolidated information. ‘An entity that choses to dscloce earnings per share inthe Separate financial statements shall present such eazzings per share information ooly on the face of the separate ncome statement. ‘An entity shall not present auch earnings per share information in the congcligoted asnaal statements. “Uses of earnings per share 4. Itina determinant ofthe market price of ordinary share ‘thus indicating the attractiveness ofthe ordinazy chare b, Ie is “measure of performance” of management in conducting operations. «Tels the basis of dividend policy of an entity. LeDefinition of terms Ordinary hori an equity instcunent tat is subordinate ‘to all other classes of equity instruments, ae ‘The Philippine Corporation Code calle this as @ common Equity nstruinent isang contract that evidences a residual interest in the assets of an entity after deducting all of its Tabi c Potential ordinary share is a financial instrument or other ‘contract that may entitle ite holder to ordinary shares. Financil insirument is any contract that gives rie to both 8 financial assot of one entity and a financial Unbility or ‘equity insteument of another entity Warrants or options are financial instruments that giva the hhlder the right to purchase ordinary chore. Basic earnings per share Net income Base EPS“ “Ordinary shares outstanding mount after deducting ‘The net income ie equal to the dividends on preference share. If the proference share is cumulotive, the preference dividend for the current year only is deducted from the ef intome, whether such dividend is declared or not. Ifthe preference share is noneumulotive, the preference dividend for the current year is deducted from net income only if there is deeloracion, If there isa significane change inthe ordinary share capital luring the year, the weighted average number of ordinary shares ousanding ducing the peviod should be used ok 260 Mlustration ‘An entity provided the following information forthe current year: 1.000.900 ‘sono 000, Income from continuing operations Income from discontinued epeaton Netinoome Basie earnings per share Income from continuing peatons :4sto 200 Preference dividend fremeatyeer(1OXxP1000.000) (100500) Income to orinary share Income from continulag operons 400,000 60,000 shares) Income from diacotinued operon (600,000/50,000shares) Net income Mlustratior’ ~ participating preference share “Am entity had the following expital structure af the end of ‘the current year: Ordinary shar capital, PLO par, $0,000 sbareisnued ao & and otstanding ‘so1ac00 Preference share capital, PSO pr. 40000 shares issued andowsanting 2000000 Net income fer the year ‘006,000 ‘The preference dividend rates 10% and the preference share {s nonconvertible but cumulative and fully participating 997 uwa ae Computation After the ordinaey share has been paid dividend of P20 Ber share, the preference share shall participate in any sai fonds on prorata basis with the ordinary a Prefence — Ordansy eleeneQu%e2e09000 sagan saSalian ops nen «goon or Fartagnton Jaco * “at Taal eed am “Zion Net inne austin enon +200 ion ‘Balance for participation Aaonoog ‘mount Teacon Patcpation Frefaane sia 2000000 ant Sraseyeter” * Somogeo rise jmaow Basic earnings per share Enfemasare (149000150000 Lao ‘Ordinary share —_(2,560,000/80,000) an ‘The “participating” preference share can be treated special ordinary share. 908 Determination of weighted average Shares re usually included in the weighted numberof shares Beare date consideration is receivable, whichis usually the date of their issue. ‘a. Ordioary shares in exchange for cath are included when ‘cash de receivable b. Ordinary shares jaued as a result ofthe conversion ofa ‘Stor instrument to ordinary shares are included from the date that interest ceases to accrue. Ordinary shares iaeued in place of interest or prinipal tn other nancial instruments are included from the date that interest ceases to accrue. 4. Ordiiary shares issued in exchange forthe settlement ofa liablity ofthe entity are included from the setlenent Ordinary shared issued for the rendering of services to (he entity are incloded as the services ore rendered. : Ordinary shares istued as part of the purchase Consideration of m business combination th Soquisiton are included in the weighted aveage number (Of thates from the date ofthe acquisition ‘bh. Ordinary shares that willbe isued upon the conversion of e mandatory convertible instrumens are ineluded in the ealelation of bass earnings per share fom the date the contract i entered ino. 4. Under IFRS, eubscribed ordinary shares or partly paid ‘Shares aze included in EPS ta the extent that they are fntiled to participate in dividends Under Philippine jurisdiction. subscribed shares are tated ro pericpate fully in dividends 998 aMlustration 1 - Average shares outstanding Jamwary 1 May September 1 Beginning balance ‘Adiionalsesasce ‘Additionelinrwance ‘otal sharesouttanding Computation Date shares January 1100000 Mar” 1 somo Septemberd 150000 ‘Average share. (3,000,006 /25) 3qo00 Another approach Date Shares Fraction Average shares January 1 109000 ane 100000 May 1 180.000 ana 100,000 September 180000 ana 32.000 1000 Mlustration 2 January 1 Beginning balance 10090 Mark” 1 lane for esh, 000 diy {O0eshare dividend woo November 1 ‘Treasury shares (3209 ‘Tox sharan oustanding Computation Oo) o 9, Date Sharer Months outstanding Peso mosthe Jamary 1 an000 2 14coo00 ‘Mer 1 "eoo00 0 ‘0 November 1 (18000) 2 Can ‘2010000 Another approach Dae Shares Fraction Aveage Saouary <1” an00 nz 20000 Merk “1 "euon0 tone ‘00 November 1 (33000) 2m «3300 16300 ‘Where share dividends or share splits eeate a change in the capital structure, the incroaso or decrease in the ‘number of shares shall be recognized retroactively nother words, the share dividends or share plit shall be tHonted as a change rom the date the original shores were fesued. ‘Thus inthe illustration, the share dividends of 0,000 bares fre identified 0,000 with the erigisal shares of 100000 fon January 1, snd 10,000 with the orginal shares of 8000, fon Mare 1 anes wyMlustration 3 Purchased 20000 treasury shares 208 share dividend Share split 8 for 1 Computation @ Dae Shares Sanuaey 1 1.200,000 dead 1 “eto00 ey 1 (12000) ‘Average dares 2080000/19) ‘Shares Giansry 1 (lino00 x2x12029) 1.200000 Qed 1 (snoo x2%12025) ‘20000 1 (ino x12038°°) 22600 “The ares are multiplied by 2 because ofthe 2 fo elit by 1120 becruse of the 20% ehare dividend and by 6 becnuse.of he 5 fr pl. ‘The July 1 treasury shares arent multiplied by 2 because the sheres are purchased after the 2 fr 1 split on June 1 Another epproach w o Gz» Date shares “Fraction Average shares Jouey 1 y2nac0 aT 1.200000 aed 1 “eonmo ania ‘sn000 Bir 1 Caamaoy ene (0000 90000 1002 Bonus issue tn a bonus issue, ordinary shares are issued to existing harsbalere for no consideration. ‘therefore, the number of ordinary shares is incr Wwthoutinerene in rescues, ‘A bons insu is ataally a share dividend. ‘The numberof ordinary shares outstanding is adjusted for nate cbonge in the murber of ordinary shares n hicandingosif the bona ixue has ocurred tthe begining the earliest period presented Mustration etincame 2017 20000 Retincome 2018 Booty ence ‘Ontinry hare outstanding on Janey 12017 0a October 1, 2018, the entity implemented a onus issue of edthry shares in the rato of to ordinary shares Gx each Criginal ordinary sare If & comparative income statment is presented, the base ‘Barings pet shaze wil be shown a flows: (inary hare outitanding Yanan 1, 2017 scacto ‘ice en Ober, 48 00000052) ian ‘Tot odiary sharescutsnning wom Basic earnings per share 2017 (200000 60600 200 1000 2018 (000.0007 00000) ‘The bonus issue is treated as if t bad occurred at the beginaing of 2017, the earliest period presented 1003, uwRights issue hon evan hae a Hovde pei lew lon he eset shar -norng, s riha ne nu hose lament foie moh are is The Phipine erm for ight ne “tock sgh” and ‘the legal terih is “right of preemptign’ * "The problem isthe determination ofthe theoretical market value ofthe share ex-right. sons IMlustration or 1.375.000 8 17en800 oo 2 aieoo Cndinury shares ovttaoting prior oehtesue 0900 ‘ighsinue daring 2017—oee new ordinary share forever Soustandingsharercratatalol a000 Dateofearcie fights ‘psl.2018 Manat valu bar fright or marae aloo tars righ no Burin or ulacrption pie o ‘Theoretical market value of share excight Market valu forinacy barsouttanig (Go otdsharesx LID, ‘5500000 Protcelefrom ene oahs(10000eharesxPS®)_ 50,000 ‘Taal Cntinniy shares outstanding befrrightsine (Ordinary aban iaued rough exer och ~ otal ontnary sharee oustanding ‘Theoret market value of hare extight "000 000760000) ‘The odjusiment foctor ie equal to the market value of here right-on diced bythe market vale of sare eight. ‘Thus, PLO divided by P100 eqs 2.10.Another approach ‘The theoretical value of « right i computed as follows: Marka vali of shar ighon ina aca pt ‘Number of its to purchase ‘one share plus 1 Applying the formula, the theoreti value of one tight is: 0-50 60 Sar rt Meri “Market valuo of share righton ‘Theoretical value of right Market value of share ex-ight ‘Adjustment factor (110/100) Value of one right 1006 Computation or Netincme Orda shares eateanting iy ty tse dj erdinary sare Bul PS (1,376, 00738,00 Metis Janay 1 (00811023112) 7 1 nanos 9) “Ton eerageerion shart BakeEPS. (.76ns0/84720) 2 (On January 1, the faction is 3/12 because the rights are fetualy exerted 03 Ape 2018, "The pio ie thre math os January Ito Apel 1, 2018 On Apeil 1, 2028, there are already 60,000 shares ‘outstanding, 80,000 shes on January 1 2018 pus 10,000, ‘hares insoed through exercise af igs ea Apr 1, 2018. ‘The ptiod i sine moi from Apel 1to December 3, 2018. Nevinae Onsarysaresoecantinghebresecaetrighs 200 ‘2sanc9 Dtcinnytharesesed mth ena thas 1 “Teaterdinuy eres uo BaicBPS_(2.40n000/60000) 2 oor weBasic loss per share Katee «gor0000 Oat sar cpt Pooper, 109,00 sbeee eo Freee have rp P100pay wena, 250 chars covert e 00 ‘rdoary chases 20a ‘Computation bo Ne : so¢0000 | Prdtmoceditnd aew2060000 Conse “Tol ea nny habla (5200000 | __Dhidebyodinay haere ostnding imo | > aseteazrstae Ce» Observe that ifthe preference shake is cumulative, the preference dividend is added tothe ne! ls to get total loss (0 the ordinary sharehalders, However, ifthe proferenceehare is nonoumulative, the proracn diuad ie Ignored becuse presumably there {Sho declaration snes there i «net lo, such a cat, the basic les per share is determined ax fllome: ae ‘6000000 Dirty cedinny shares outtanding ogo asc per ahere ar 160s QUESTIONS 1. What isthe meaning of earings per share? 12, What are the sro presentations ofearaings pe share? {8 Whatenttes are equized to discov earnings pe share? {Explain he presentation of erags pe share inthe {otae semen 6. Bnumeras sone sts of earings per aba Dale te flora Onin she Belg tame © Pesci enery share 4 Phenclireceat & Warrant or entan 1 Baplain the fomula fr the computation basic earings er she ha be eatient of el ‘Computing baie earings per share? 9. Biplain the treatment of partipating preference share. 10. Blain the trntment of subscribed ordinary shares ia [BPS computation, 11, Explain th treatment of ehare slit 12, Baplaia the treatment of bonus ese or sack vend. \c0 dividend in 19, Explain the testment of vights iss. 1M, Whit athe adustmet factor” if hare is a ight ice? 1, Explain the formula fhe computation of bss ns pee 008 LtPROBLEMS Problem 28-1 (ACP) a Zonal Company reported the flowing information for the Incas Pd os be dicotinundopertns ‘soo Required: : Present the basic earings per share on the face af the income ‘tatement under each of te following assumptions 1 The entity has only one clas of share capital, 60,000 ordinary shares with pur vale of P100 2 The entity has two clasts of share capital Prforeneshare, emma, P100pae 2.00000 a Ofaonry caer Pll0par sa0oo shares oo) ‘Problem 282 (IAA) ‘Now Company ad the following ordinary share transactions fbr the eurrent yout ‘Beginning balance, 120,000 shares, P50 par June 1-_esued 12000 shares at PO per ehare September 30 Purchssed 24,000 shared st PSS per share to beheld as treasury January 1 ‘The entity reported net inconie of P8,690,000, after an ‘expropriation loss of 7608.00 forthe current year, Required: 1. Compute the average shares outetinding. 2 Compute the basic earnings per share rie ll Problem 283 GAA) ‘reuse Company showed the flowing information for the J endod Deon 3, 2017 Ince fom contig operons azesc0 [ose dentouedepeieose (sac Netincone 325000 Retained nrings—Sansaey Lowa ead 42500 ‘hrdend plea preference shart ano hrdend paid rary hare (irae 305000 etalon ersogs Dosen ‘At the end of 2017, the entity hax outstanding 140,000 Grdinary shares of PSO par value, and 10,000 12% ‘oncumulatve prerence shares with PIOD par value, ‘On Apel 1, 2017, the entity isuod 20,000 ordinary shares for POO per share Required: 1. Compute the average ordinary shares outstanding. soings per ehare in the income -% Present the basic statement, zyProblem 26-4 (IAA) Praise Company had 3 net income of P18,000.000 fo the Humor Caspany bad the Glowing ondinary share activity wing appropriations have not beed, Along the erent ear ‘Sie ya Ty loa 7 tne caer annronteeetiiedtrtyacs $im0i/2 $°> Seeitsanet smoriegearen act Ss ‘Bearer thre dinar inde a payablecaredenption 1.00 000:-> ris Peleg eer saci denon ses of PL pir | ‘The entity had, 9,000,009 ordinary 3 ae ee ad the beginning of the year. The fllwing ftanseeuons cocurred during the year’ Jan 1 uta Pesce Ppl toda anette Uitedbadiedamamtodeestarspuidep — 20000 ‘The entity had 100,000 cumulative preference shares ‘Outstanding during the year. The prefrtce share ns par ‘law of POD end 12M dvidnd rate, “The entity sustained a nt es of 2.699000 fr thé current me gett Pliscket pie 9 pertains fom JET Pardes clove shares st D2S0perdhare 0000 Required 1. Compute the averige ordinary shares oustanding 2 Compute the basis eruings per share. 4.05 Aroien 261 OR) London Company bad the following ehace capital a the end [iret 8 (08) eee ee senesced — ou cf the carent year. 2 Marah Sevan ~ Preece share coptat P100pu, 2000 ares 0000 ie aioe | Galata reper oboees SRE? Cin November rrpabacesenied RD a a ane Toray bl 59000 cuna tev saath) SEER inp dnd ni tha i ett ‘meant tat nin cman ptemnamtn SEE Prete ar pa Biidsod ran 108 Aer th ordinary share has bees paid a ii et there, the preference shave Ehal par “vor nob iin nist asian Required: Henk, ee | eines x Bonen retary c re 01 =(Peroblem 26 (ERS) — Myeitd Tr Is barat eldest rece Company provided the fling maton: coxe Seelam 2017 Rtas rob ‘Steam ‘caw ed argh fc in the (Gresch Dowstanding shares oF March 2018 andthe exerci “The ghar exerci rice PS per sare, ‘The market pie of on diary chars immeditely tone (heen of ghia og Marah 2018 8 PL Require 1. Compute te theoreti vale share exxcht 2 Compute te adjustment fate TD 18 Compate the tale earnings pes ehace fr POL. 2018 and StI ao. ey ‘Problem 269 GFRS) ‘Arable Company tne eitiggshareoler ght iaaue ‘fens fc sss at pec of Per are tb eer 00 ‘fpr 0 The marble ef thre was POE hat date re $10,00 ordinary shares On January 1, 2047, oustanding ‘Th eotey reported net income of 2.20.00 fo 2017 snk PSsoo.mb oe aO Required: 2, Compute the torte! value of hare exit, 2 Goepate te sdjeunent far 5. Ceempae the bre eavaigs pr share for 2017 and 2018 a Problem 28-10 (AICPA Adapted) Madden Cangpany bad 60,000 olinary shaze utd 0d Medien Carat any 1917, Durig 21, ada cuanto ewe. On Janey 1 20 teens SREY ooo nonoorercle protrence sa During 201%, th ey ere and paid 7210000 ash Dae Pon the ondicary stare and 120,000 on the preference sare ‘Te net ina forthe caren ear was PTS0.000, ‘Whatamous shold be opera as boc earings per share? © 1030 % 1280 © ae Problem 28-11 (AICPA Adapted) Royal Company reported the flowing capital tonne om Snescy 120 ‘Shares faruedandoctstanding 2oxoeo ede shar a Protech ‘ion ‘On October b, 2017, the ea sued 10% ick vided fn diory shee and pid the anaual cath dividend of 09.00 a preference share, ‘te preteen shai renee, noaparipsting and oncosterte. “Tae net nse fr the core sear was P2000, \Waatamoun ld be roared as basicen ring pees? $20 bseProblem 28:12 (IAA) Fell Company had 80,000 ordinary shares isnued and batty on Janay 220 (On June 90,207, the ent esed 40.000 ordinary shares ( Sepeember 1, 2017, 50% share dvdend was i all celinary sharehalders. “The net income forthe year ameunted to P2,400,000 [Reloding en expropdation fan of P1BQ000, ‘What amount shouldbe reported a baseearings per share? Cw © ee ins Problém 28:18 (IFRS) ‘Smart Company isan entity Usted on renguned tack ‘Shchunge, Tie iatesoat of fomprehenaveinsome fr the [Star ened Dsomber 8, 2017 showed the following: rt belt ‘5an000 Hemet eon Protester {ec 1 adtion, the entiey paid duting the year an ondinazy ‘ivdend of 400,000 sod preference dvdend of 300.000 fon redeemable preference shares “Th eatiy had P1,000,000 of PS pr vale ordinary share ia {isos threaghont the gear and Suthecaed share capil of 300000 endian eh ‘What amount shouldbe reported as basiearaing per share? @ a0 O & io00 © 8a ate re Problem 28-4 (AICPA Adapted) ‘Tim Company provided the flowing tcansctions during (he caret yar ‘Waatis the weighted average mumberefshares outstanding? a «0000 wr tis ‘000 Problem 2615 (AICPA Adapted) (on Januey 12017, Cae Company bed 000 eiiary Saaetancaietovatig Te coi ound 1D are ‘Eulbeden day 12 ‘On Oeste, 2017, th ny perched 24.00 rdinary ses Be ena an ned pore bythe ext meted ‘atin the weight average amber of shares outstanding? soso00 & sooo0 S600 -Z S000 Problem 28-16 (AA) “Aube Company had 602.000 edinary shares out poser Bano 120.09 haces cn May 1, purses a0 cay shart on Septamber 1, and ised 80,00 ‘aes 20 Novenber 1 Whats he weighed average number of shares oustanding fete yar? 73000 ‘3.000 © esn000 4 ow at 3Problem 28-17 (IAA) At the besinning of current seas, Nisan Company had 100,000 ordinary shares outstanding. Daring the ccrent sat the fling event care Meck 1 thnk eve Set Reedensitlbaoal ane Senter! ewihaw len ‘Weta theweihtad average number of shares oustanding Sethe ear? 2 rn iim 2 Biee 5 Bees Problem 2618 (IAA) Ronaly Cuapany ad 100,00 ordinary shares iaoed an ‘oustanding tthe Begining of eure yer. Dasigecurent your, the ety hate lowing tinny Sar main Apel”. 1 arsed 30,000 previo unitued saree My * 1 Spite shares? ‘Tune $0 Purchased 1000 ctae the trenury uy | 50 Distabated'« 20% tora rue December St Spit the share or ‘ass the weighted everage number of hares outstanding forthe yar? 1018 Problem 28.19 (AA) “TeoyCompay provid the ori ibreent ae dora | Sammaaon ae Hew, 1 Retires rf Ba” 1 deed neyo Moe 1 haamaried = Sepecter esata ay Sibert eda Wt inthe weighed average auer of shares outstanding Erte yar? @ 205,000 © ansto © touts @ au Problem 2820 (AICPA Adapted) re ampany prove be loin irate in elon TS SEGELE San pal ie cares ae et hr pr +m ermine se ior] See ES sc) ee ss Janay 1 Starostin ‘hats average numberof shares that bold beucd in ‘Sldating baa ngs prea?‘Problem 2621 (LAA) ‘Masts Company hed 250,000 eriinay shares outta tthe bepianing of 207 = ad i¢210m0sare ‘eda sae dend Sven Perched 100 share urd be narert Shcotwocame 1 What ste weghtd average nuter of share for 2017 Sarconparatve Sauna statements! the end of 2018? @D s020 ® szsaco © 58400 & ongooo 2. Whats the weight svoragenber of shares for 2018 ‘or conpuraiveGaaacnl sttomerte tthe end of 20187 003.400 Towa. = tesco a “se\tco Problem 28.22 (IAA) ‘Sharon Company provided the floeg information in ‘lito to ordinan shaes Ging th cate ear Janae 1 ‘Staremeanig f Set RS od {Tranayearepurchaed iow Deeeie! — deiooested ‘What isthe number af weighted average sires? i Problem 2823 (AA) ‘Venezuela Company provide th lowing transactions hat Mieel edinney sare capil during the euret ear: Janene mecca PEGE, { Eileoscomnny snes inten Fees tora starsiobebldarteary, 1 Spite sae 1 1 Sid poner ace, 1 Tender dens, ‘Problem 2624 (AICPA Adapted) ‘Vee Company repre he fing apt strctre daring ir Prien ae cgi PO pr, cama, ho daesrdandonaosng sco nny abe capal apt, 0000s ON troledoananlog ntcoon0 "Th entity reported et fsome of P5.000.000 for the year {eded December i, 210 ‘The entity pido preference dividends during 2018 and ‘sid PIG 000 i preference dends dorng 2017, What amcuat ahold beepers basicearings pe ehare? a 2420 3ts0 4 $500 ann 33es Problem 2825 (AICPA Adapted) ‘lobe Company Bad the filling share capital ited and (standing for the ene corent yar ' 0gcerdinar sar P10 par omooo itoras econ perece hrs OP, Ncomterablesharfirtharetntocrisary sare 200000 ‘Toe tine forthe ear was P0000, andthe ins tania forthe ear was 80%” 1s de computaticn of baie earnings pe share, what the {tovunt tobe tnd a earings? | a 24000 rms 1224000 1 @ tamow Problem 2626 (IAA) |. Yepon Company ered ne ime of Ps 00000 | eaten fv pins hen ela ie ‘St Wow ad ince canst low of P5000,000 |The hareholder equity atthe current year-end showed the | following details: ee sors uae ee” ae Paes pe ES ie SE came ‘What ainnint shouldbe reported as basic earnings por share? | Cie ous oe fae Problem 28-27 (ACP) Company hud 109000 ordinary sare onan ths tonne te einagy se Tb te at of NA a BER ts ey 4 aharesguatanding, The Sacket ore a ae erate immedi pei te gh roe oP. cts te bere market vale of the hare exe? 400 ® $800 © 3000 Bs Problem 2628 (FRS) COndanuay1of he cerept yen, Bee Company had 00090 Orydenua Let Se Stndiey Dasae fee 7s be ety szaingy Sart Cicerone ordinary stares 110 ht ued io reo nara cussing The phe i ots hacer FT maghe ue fhe nay or creat Opn co Oger Twas P15. The set REEL rhe pont wan F5,800000 ‘What eount bold be roparted x bas earings pr share! = $300 a 5288 Problem 2629 (RS) onan et ae Saco 790 bn 00, Sarg eae ae isced'ah Soest ibis feat Bem Se lid he oka os eee si een eS ieee eae ee 008 ‘What amount shoud be reported abasic carsings estar? 028 3Problem 28-30 (IFRS) ‘eel Company fd 69000 ordinary shares outstanding the bingo ete corrent ene Dun he yor the ni Bhool eke co segue oe oda share at P10 in the atl of oe naw share or every shares outtandog, The Ehret vlus of the ordnny share medal pie tthe Files cus is FSS To ga were einen October 1 ‘Fh tt nsone forthe caret peri 8600.00 ‘What aoant shoul be separa ga asc arin pe abare Ie lncone sateneat? ae . 20 Ag & Bo as Ha Problem 28-31 (IFRS) Athens Company provid the flowing formation: Risse ersie ae SSE ndageedewmtestzor” sm ‘Atonusasue was made on Otte 2018 in the ratio of ‘eo aa hares for ext rginal ordinary ‘Shar on Deestiber 3,201 1. What amount shold be reported at 2017 basic ernie hare ia th 2018 comparative fama statement ‘What amount shold be reported at 2018 basic eraings PULSE UO ois cee come sateen? a. 200 io © 19 218 Problem 2832 (FRS) neply Compay bad 100.000 opty shan in ne ot ‘Money Compete year On Say 1 ety oe anual in rey ofr 3 bras, On Ose 3,00 pe sea pew tars fr cas af sack pre hen alain iniearnigs rs Roche ddd into the pro ae 2. 10900 2 bom many aes aaa oe Sere: Gutiaaing all vee woe 10000 ADsto ording fd noncumaauive peearence shart 00 pei Aanee tt ua dvdend of P00 902 2 PRER Y FEE cthseome tbe curtnt year was P99 “hat amount bolt repeal asbasicearing peers? (On December 81,2017, Peacock Company bud $00,000 erect re bewed and ona, {0000 of whi genes shes So traning evoyhout te eat 6d 1d SS teish rece mgd on October 1 2017 The et Bea ar he yar was 5100000 ‘Whatarount hl be epored as basiceariagpersbare? oe n33 1038Problem 2838 (IAA) Problem 2837 Multiple choice (PAS 33) (0 January 1, 2017, Pink Company had 200,000 erinay ‘Sharer and 100,000 (4 #10 parte cumultne pte ‘Share sutstanding, No dvtonde were declared on eer {he parce oednery shares in O16 o 017 (On Febraay 10,2018 pre the wane of he Gani ‘Sister the yar ended Decor 3, 2017, the en Sires 100% share opt en tw ediay shares ‘Te et ase fr the yor was 7,500 What amount should be report abe earings er share esr 3540 8 Problem 2636 (AICPA Adapted) Struc Ganpany hoe cs shar cpl uiing nl ote cokes that ae potancally coer Dering 201%, 100000 shares were 1. BPS dadeures a ‘a Reqsced el pe and npc ents 4 RERE Ge pte enitioe aad escournged for opal exes ce. Becouraged for pable enpuewxtes 4. Bnesraged for al enties 2. EPS dndenres are seq for Bathing whos liza shares and petal orinary ‘rer ee publ ended ty Basta tht are he proces f faring ordinary ‘Bare inthe pbb acts fe. Mientes Bede bee citinary shares and pon eriinay (ines ee pub teaded erent thas a athe ‘poses of ing vtnary shares in ple ashe 2. dina share ‘a fnaneguiy instrument thats rbortinas toate dae fel true ty ina foun Sumer or aber oats hat may (hile the bolero erdiacy shares, Goan istrueat taut ges the lds the Hebe to pacaae sary shares. Fy cova has ino oth anil hase enuy and.e Boansal Lally or e@6i ee for (0p Apsi 1, 2018, 29000 sara of wera mere ald, aon SOyT20ig Sort hare pl was wed ‘Net iosme was P1000 2018 and P8000 jn 2017 mount sould be rpstd at lasle FPS for 201 the O18 comparative none Salome? ois 18 ‘atunen of aster eo 208 fasta en aap 4. hon on entity tes Both eonsiaind and separate 2. Yhap hae pce a 8 ‘ona datebents he BPS infreation a rgd For both sts of Bean tateents 1 freee rt of Seana satemente ois Only for comoldted Beans stacomeats 333 41 Ont fr separa Encl suemenss oie 088 er Je{5 Ramings per ehare shal te computed on the bss of ‘Ordinary sbars outstanding atthe nd of he yur © Ordanyabareroutatading at the teianag of year Ordinary hares ettanding at hn mia a eae ‘& Neerage onary shares outnding daring he Jae 6 In computing tase earengs pr are, tho amount of Ateyual preference divdeads ca noneamulative ‘prfeeade hare shall | Deduced or nt inne bathe declared a nt ' Dodace fom at noone cly mes decared Added to et lose oly when Seared. need j computing basi earning pers th mount of the {sual poten dens on eamalative preference ‘Shes ete pei shal be Tenred 1 Deda gem ae nee oly we dele © Dedutd fen or nse whee Saaed or not © AEdSia ant ico weber ile or nt 1 Incomptiog basic earnings per share enentiy woud {dade wah ef he allowing? Dien emirate free ars 1 Dividend o oednay shares © Intrer oo omer Ronde Nite fem clit pros Shares 9. In computing bose ot pr shor, the sued enn petra Goad co suralativa psoas share Tesoro ‘Bolaced om the ata whathedelred o ot [Sd he net oe whether eared a. ‘Aided the ate cly when dred o a Problem 2688 Meltiple choice FBS) neningn pee share information Jo calelted before © Selanne whch ote mine! a Prefered forthe pio & Biter eed Hat iet ‘wich ewe eins dvs EPS oration) ‘Pron nhl fo rae ey Blt ad Pe a niin fhe pest Bearbateremace Pret fom pestis ines When amenity ames a share vdeod + previ rent ‘Rene yee ate See MELAS HS ox neprvous ars “4a son eu been he en anda ete RSMo aetST nen we ace 2 Ribas ems 2 BARGER at eda, aea © The wiphied average number Sting the pois aa we ‘Any duogein he numer of inary sh Aa{shtoe ne mute ofonnay hae witht & Ae ae enn Any tow lee of act Bah 4 Any convene ntrcnents tod i cas, Ordinary share ued a patos bsines combinstion ‘ze fncledd inthe EPS cleats oa” & The bevinnng ofthe ssvesing pra © Be cessation The endo he erotig pes The Sldplnt ofthe aotitng year 18 Shares iszud outs abity arin nt ‘allots frm " anne Bate of he contac fr seven Halley throoe the rendering of eres a Tee meliment aa 1 Shares te aed wpe the conversion ofa mandatory ‘overt instrament are ocaded tp the calculation base eamings pe tate on £ Rapti sear nh hare though the ee The date of converse The ite of he share serene 10. Uader TERS, where ordinary shares ar etd but not lly pall the erinary abare ave tated in BPS 4 Inthe same way a uly pu ordinary shares Aun oan iy hae the ret thatthe osc thre ened por do & Ave ignored” Problem 2840 Multiple choice LAA) 1. Where inthe anni eatomeats should basis end ‘ed BES bo pred? In masogunene dn nd analy © Indie isae sateoent ne semen a coh Bowe 2A enya rest uae and uted ernng por hare fr dosed operation Oat aah ce eh em tae Seat equed to dca iron he eo {be ino sateen orn estes {Barings pr share stall te eared fa ence © Nittoame 4 CN Boe eat operating eee (Beings pr thar hme be par pay 2 Gras prt & Prat incame © esowe Eon eiungeprtons &. Bebe peril ror {5 Baring por hare sould Ye cena nthe asi et Pelee shares & Wtvediay shoes Voting end noes celinay shares, ‘& Voting extny and pastiptos pretence shares ost |