a. Determine the weighted-average ordinary shares outstanding as of December 31, 2019.

b. Assume that Chang Ltd. earned net income of ¥3,256,000,000 during 2019. In addition, it had
100,000 shares of 9%, ¥100 par, non-convertible, non-cumulative preference shares outstanding
for the entire year. Because of liquidity considerations, however, the company did not declare
and pay a preference dividend in 2019. Compute earnings per share for 2019, using the
weighted-average ordinary shares determined in part E16.17a..
c. Assume the same facts as in part E16.17b., except that the preference shares were cumulative.
Compute earnings per share for 2019.
d. Assume the same facts as in part E16.17b., except that net income included a loss from
discontinued operations of ¥432,000,000. The loss from discontinued operations is net of
applicable income taxes. Compute earnings per share for 2019.
E16.18 (LO4) (EPS: Simple Capital Structure) Ott Company had 210,000 ordinary shares
outstanding on December 31, 2019. During the year 2020, the company issued 8,000 shares on May
1 and retired 14,000 shares on October 31. For the year 2020, Ott Company reported net income of
£229,690 after a loss on discontinued operations of £40,600 (net of tax).
Instructions

What earnings per share data should be reported at the bottom of its income statement?
E16.19 (LO4) (EPS: Simple Capital Structure) Huang Ltd. presented the following data (yen in
thousands).

Net income ¥2,200,000

Preference shares: 50,000 shares outstanding, ¥100 par, 8% cumulative, not convertible 5,000,000
Ordinary shares: Shares outstanding 1/1 600,000
Issued for cash, 5/1 300,000
Acquired treasury shares for cash, 8/1 150,000
2-for-1 share split, 10/1
Instructions

Compute earnings per share.

E16.20 (LO4) (EPS: Simple Capital Structure) A portion of the statement of income and retained
earnings of Pierson Inc. for the current year follows.

Income from continuing operations $15,000,000

Loss on discontinued operations, net of applicable income tax (Note 1) 1,340,000
Net income 13,660,000
Retained earnings at the beginning of the year 83,250,000
96,910,000
Dividends declared:
On preference shares—$6.00 per share $ 300,000
On ordinary shares—$1.75 per share 14,875,000 15,175,000
Retained earnings at the end of the year $81,735,000
Note 1. During the year, Pierson Inc. had a loss from discontinued operations of $1,340,000 after
applicable income tax reduction of $1,200,000.
At the end of the current year, Pierson Inc. has outstanding 8,000,000 shares of $10 par ordinary
shares and 50,000 shares of 6% preference shares.

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