Exam 5: Earnings Per Share

Accu Tech Renovations Corp.(ATRC)was incorporated on January 1,2018.At that time it issued 100,000 ordinary shares; 80,000,$20,3% preferred shares "A"; and 40,000,$20,6% preferred shares "B." Net income for the year ended December 31,2018 was $1,800,000.ATRC declares and pays total of $238,000 in dividends.The series A preferred shares arc cumulative and the series B preferred shares are non-cumulative.Series A must be fully paid their current entitlement before any monies are paid to the Series B shareholders. Required: Compute basic EPS.

Micky and Donald Corp.was founded on January 1,2018.At that time it issued 120,000 ordinary shares and 20,000,$30,cumulative 5% preferred shares.Subsequent transactions affecting its shareholdings follow. 2018 • September 1: Micky issued 300,000,$30,non-cumulative 6% preferred shares. • December 1: Micky issued 80,000 ordinary shares. • Dividends were not declared in 2018. 2019 • February 1: Micky issued 30,000 ordinary shares. • June 1: Micky repurchased 50,000 shares and held them as treasury shares. • July 1: Micky declared and paid $45,000 in dividends on the cumulative preferred shares, $270,000 on the non-cumulative preferred shares,and $180,000 on the ordinary shares. • September 1: Micky reissued (sold)the 50,000 shares held in treasury. • October 1: Micky declared and issued a 3-for-l stock split on the ordinary shares. • December 1: Micky declared and paid $15,000 in dividends on the cumulative preferred shares,$270,000 on the non-cumulative preferred shares,and $180,000 on the ordinary shares. • Micky's net income for the year ended December 31,2019 was $2,000,000.Its tax rate was 30%. Required: a.What was Micky's weighted average number of ordinary shares outstanding in 2019? b.What was Micky's basic EPS in 2019?

Which statement is correct regarding a company which buys call options on its own shares from an outside company?

Calculate the income effect on the incremental EPS for the following instrument:

Calculate the share effect on the incremental EPS for the following instrument:

Explain why dividends to preferred shareholders are adjusted in the numerator of the EPS calculation.

Use the following information to calculate the "weighted average number of ordinary shares outstanding" (WASO)?

Which statement is correct about diluted EPS?

Two different companies have many similarities,including the following: • They both earned net income of $3,500,000 for the year ended December 31,2017; • They are both subject to a 35% tax rate; • The average price of the companies' ordinary shares during the year was $26; and • Each company had 1,400,000 ordinary shares outstanding during the year. They do have slightly different complex capital structures,however.Specifically: • Company ACE had stock options outstanding the entire year that allowed employees to buy 50,000 ordinary shares for $20 each until December 31,2019. • Company DUECE had $600,000 in 5% bonds maturing on December 31,2019 that were outstanding the entire year.Each $1,000 bond is convertible into 5 ordinary shares any time before expiry. Required: a.Calculate the basic EPS of both companies. b.Prepare a schedule that sets out the income effect,share effect,and incremental EPS for each company's security that is convertible into ordinary shares. c.Consider each company's POS and determine whether it is dilutive or antidilutive.

Calculate the diluted EPS given the following information:

Briefly explain the main the difference in the requirements of IFRS and ASPE in regards to EPS information.

Which statement is correct?

Which statement is correct?

What EPS information disclosure is required from private companies that choose to apply international standards?

Use the following information to calculate the "weighted average number of ordinary shares outstanding" (WASO)?

Which statement is correct about the "weighted average number of ordinary shares outstanding" (WASO)?

What is the meaning of "net income attributable to ordinary shareholders"?

Which statement is correct about basic EPS?

Calculate the income effect on the incremental EPS for the following instrument:

Which statement is correct about earnings per share (EPS)?