Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Leek Cos profit for the year ended 31 December 2018 was 1,500,000. On 1 January 2018 Leek Co had 500,000 ordinary shares outstanding. On 1

Leek Cos profit for the year ended 31 December 2018 was 1,500,000. On 1 January 2018 Leek Co had 500,000 ordinary shares outstanding. On 1 July 2018 there was a full market price issue of 200,000 additional shares. In addition the company has one potentially convertible security: 800,000 of 5% convertible bonds, convertible into a total of 200,000 shares. Assuming a tax rate of 30%, calculate the companys basic and diluted EPS.

For calculating the basic EPS the weighted average number of shares for the year ended 31 December 2018 is ["900,000", "700,000", "600,000"]

The Basic EPS is ["2.50", "1.67", "2.14"]

The restated profit for calculated the Diluted EPS is ["1,512,000", "1,528,000", "1,540,000"]

The number of shares for calculating the Diluted EPS is ["800,000", "900,000", "700,000"]

The diluted EPS is ["1.91", "1.71", "1.88"]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Challenge Of Management Accounting Change

Authors: John Burns, Mahmoud Ezzamel, Robert Scapens

1st Edition

075066004X, 978-0750660044

More Books

Students also viewed these Accounting questions