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  • (Determination of Earnings and Earnings Per Share) : Problem 6

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    elaine aguilar
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    Angelique Corporation had retained earnings of P450,000 on December 31, 20x5. It paid common dividends of P25,000 in 20x5 and had retained earnings of P400,000 on December 31, 20x4. To calculate earnings for 20x5, the change in retained earnings from December 31, 20x4 to December 31, 20x5 of P50,000 is added to the common stock dividends of P25,000 for total earnings of P75,000. With 20,000 shares of common stock outstanding, earnings per share is P3.75.

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    Angelique Corporation had retained earnings of P450,000 on December 31, 20x5. It paid common dividends of P25,000 in 20x5 and had retained earnings of P400,000 on December 31, 20x4. To calculate earnings for 20x5, the change in retained earnings from December 31, 20x4 to December 31, 20x5 of P50,000 is added to the common stock dividends of P25,000 for total earnings of P75,000. With 20,000 shares of common stock outstanding, earnings per share is P3.75.

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    15 views4 pages

    (Determination of Earnings and Earnings Per Share) : Problem 6

    Uploaded by

    elaine aguilar
    Angelique Corporation had retained earnings of P450,000 on December 31, 20x5. It paid common dividends of P25,000 in 20x5 and had retained earnings of P400,000 on December 31, 20x4. To calculate earnings for 20x5, the change in retained earnings from December 31, 20x4 to December 31, 20x5 of P50,000 is added to the common stock dividends of P25,000 for total earnings of P75,000. With 20,000 shares of common stock outstanding, earnings per share is P3.75.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 4

    PROBLEM 6

    (Determination of Earnings and


    Earnings Per Share)

    Lalaine Aguilar
    Problem

    Angelique Corporation has P450,000 of


    retained earnings on December 31, 20x5.
    The company paid common dividends of
    P25,000 in 20x5 and had retained
    earnings on P400,000 on December 31,
    20x4.
    a. How much did Angelique Corporation earn
    during 20x5?
    b. What would its earnings per share be if 20,000
    shares of common stock were outstanding?

    Required
    Angelique Corporation

    A.

    Retained earnings, Dec.31,20x5 450,000


    Less: Retained earnings, Dec. 31,20x5 (400,000)
    Change in Retained earnings 50,000
    Add: Common Stock Dividends 25,000
    Earnings available to common stockholders 75,000

    B.
    Total Earnings
    Earnings per share =
    Outstanding shares
    75,000
    =
    20,000 shares
    Earnings per share = P 3.75 per share

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