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    Quiz2 - Basic EPS - Solution

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    argene.malubay
    The document contains calculations and journal entries related to share capital, dividends, treasury shares, and earnings per share. It includes calculations of average shares, dividends paid, share transactions, and earnings per share.

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    © All Rights Reserved
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    Quiz2 - Basic EPS - Solution

    Uploaded by

    argene.malubay
    11 views3 pages
    The document contains calculations and journal entries related to share capital, dividends, treasury shares, and earnings per share. It includes calculations of average shares, dividends paid, share transactions, and earnings per share.

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    Quiz2_basic EPS_solution

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    © © All Rights Reserved

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    The document contains calculations and journal entries related to share capital, dividends, treasury shares, and earnings per share. It includes calculations of average shares, dividends paid, share transactions, and earnings per share.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    11 views3 pages

    Quiz2 - Basic EPS - Solution

    Uploaded by

    argene.malubay
    The document contains calculations and journal entries related to share capital, dividends, treasury shares, and earnings per share. It includes calculations of average shares, dividends paid, share transactions, and earnings per share.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 3

    Net income 4,440,000

    Divided by EPS 1.50


    Average Shares 2,960,000
    Less:
    Jan 01 (1,200,000 x 200%) 2,400,000
    Apr 01 (400,000 x 200% x 9/12) 600,000
    Average shares for Oct 01 transaction (40,000)
    Divided by share dividend 200%
    (20,000)
    Divided by 3/12 (Oct to Dec) 25%
    Treasury shares acquired (80,000) 1

    Jan 01 (400,000 x 2 x 12/12) 800,000


    July 01 (200,000 x 6/12) 100,000
    Average shares 900,000 2

    Jan 01 (300,000 x 1.2 x 12/12) 360,000


    March 01 (120,000 x 10/12) 100,000
    July 01 (60,000 x 6/12) (30,000)
    Average shares 430,000

    Net income 1,075,000


    Divided by average shares 430,000
    EPS 2.50 3

    To record ordinary share dividend:


    Retained Earnings (10% x 120,000 shares x P130) 1,560,000
    Share capital (10% x 120,000 shares x P100) 1,200,000
    Share Premium 360,000

    Increase in ordinary share capital (8,200,000 - 6,000,000) 2,200,000


    Less: increase in share capital due to share dividend 1,200,000
    Increase in ordinary share capital - July 01 transaction 1,000,000
    Divided by par value per share 50
    No. of ordinary shares issued on July 01 20,000
    To record July 01 ordinary share capital transaction:
    Cash ((P50 x 20,000 shares) + P1,000,000) 2,000,000
    Ordinary share capital 1,000,000
    Share Premium (P50 x 20,000 shares) 1,000,000

    To record the treasury shares transaction on October 01:


    Treasury shares (12,000 shares x P120) 1,440,000
    Cash 1,440,000

    To record the reissuance of treasury shares on December 01:


    Cash (6,000 x P70) 420,000
    Retained Earnings (balance) 300,000
    Treasury shares (6,000 shares x P120) 720,000

    Beginning balance 3,000,000


    - Share dividend transaction 360,000
    - July 01 transaction 1,000,000
    Ending balance, December 31 4,360,000

    Retained earnings, Jan 01 3,000,000


    Share dividend, March 31 (1,560,000)
    Share dividend, December 01 (300,000)
    Net income (SQUEEZE) 2,260,000
    Retained earnings, Dec 31 3,400,000

    Beginning (120,000 x 1.1 x 12/12) 132,000


    July 01 (20,000 x 6/12) 10,000
    Oct 01 (12,000 x 3/12) (3,000)
    Dec 01 (6,000 x 1/12) 500
    Average ordinary shares 139,500

    Net income 2,260,000


    Less: Preference dividend (4M x 10%) 400,000
    1,860,000
    Divided by average shares 139,500
    Basic EPS 13.33
    4

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