I. The shareholders’ equity of Northern Finance Inc.

shows the following accounts:

Share Capital, P150 par value, 5,000 shares P 500,000

Share Premium 100,000

Retained Earnings 360,000

The net income during the year is P120,000.

a. Compute the book value per share.

Book Value Per Share = Total Shareholder’s Equity/Outstanding Share = 960,000/5,000

=P192 per share

Total Shareholder’s Equity = 500,000 Share Capital + 100,000 Share Premium +

360,000 retained Earnings= P960,000

b. Compute the EPS.

Earnings Per Share = Net Income / Outstanding Shares= 150,000/15,000

=P10 per share

II. The shareholders’ equity section of the balance sheet of Southern Motors Corporation shows
the following accounts:

Share Capital, P40 par value, 15,000 shares issued (of which 3,000 are treasury shares) P 600,000

Share Premium 50,000

Retained Earnings 310,000

Treasury Shares 96,000

The net profit for the year is P150,000.

a. Compute the book value per share.

Book Value Per Share = Total Shareholder’s Equity/ Outstanding Shares =

864,000/15,000

=P57.60 per share

Total Shareholder’s Equity = 600,000 Share Capital +50,000 Share Premium +310,000
Retained Earnings – 96,000 Treasury Shares = P864,000

b. Compute the EPS.

Earnings Per Share = Net Income / Outstanding Shares= 150,000/15,000

=P10 per share