P5. TOPIC: SHAREHOLDERS EQUITY

Problem 5

Seven seas Company had share capital of two million shares 1 each fully paid up. On January 2, 2020 Seven Seas Company issued one million 1 ordinary shares. The full price of the new shares was 1.50and they were 50% paid up on issue. The dividend participation is to be 50% until fully paid up. The shares remained 50% paid at December 31, 2020. During 2020, the average fair value of one ordinary share was 2.00. 2020 Net income was 8,000,000.

Q1. Whatisthe basic earnings per share?

Q2. Whatisthe diluted earnings per share?