Problem 1

At the beginning of the current year, Xiala Company had 480,000 P60 par value ordinary shares and 100,000, 10% P100 par value convertible cumulative preference shares outstanding. The preference shares are convertible into 100,000 ordinary shares before share dividend and share split.

During the current year, the following transactions affected the ordinary shares:

- February 1 Issued 120,000 shares

-March 1 Issued a 20% share dividend

-May 1 Acquired 100,000 treasury shares

-June 1 Issued a 3-for-1 split

-October 1 Reissued 60,000 treasury shares

The net income was P35,000,000 and the entity did not declare dividend on preference shares.

A .What is the number of average ordinary shares outstanding?

B. What amount should be reported as basic earnings per share?

C.What amount should be reported as diluted earnings per share?

Problem 2:

At the beginning of current year, Sheldon Company had 500,000 ordinary shares outstanding with P100 par value.On the same date, the entity had also unexercised share options to purchase 50,000 shares at P180 per share. The fair value of the share option on grant date is P20. The average market price of ordinary share is P250. Net income for the current year was P15,000,000.

A .What amount should be reported as diluted earnings per share?

Problem 3

At the beginning of the current year, Atlantis Company had 100,000 ordinary shares outstanding. On the same date, the entity had issued share options that allowed employees to purchase 40,000 ordinary shares. The option price is P10 per share.

The options were exercised on April 1. The average share price was P20. The share price on April 1 was P16. Net income for the year was P2,000,000.

A. What amount should be reported as basic earnings per share?

B. What amount should be reported diluted earnings per share

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