Question
Need to identify the financial reporting issue below: At the date of incorporation, the company had issued 2,000,000 common shares for $10 per share. On
Need to identify the financial reporting issue below:
At the date of incorporation, the company had issued 2,000,000 common shares for $10 per share. On February 1, 2019, 20,000 of the shares were repurchased and cancelled by the company. The controller included the $1 million cost of this repurchase in operating expenses. The company had issued a call option in 2018, expiring in 2020 and allowing the holder to purchase 40,000 shares for $40 per share. The average share price in 2019 was $51. Company reports under IFRS.
Given:
EPS given: ($9,800,000/2,000,000) = $4.90
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