Question 4 An auditor for a company, you have been assigned to check Platinum Corporation computation of earnings per share for the current year (2019). The controller has supplied you with the following computations. Net income $3,374,960 Common shares issued and outstanding Beginning of year 1,285,000 End of year 1,200,000 Average 1,242,500 Earnings per share: 3,374,960/1,242,500 2.72 per share You have developed the following additional information. 1. There are no other equity securities in addition to the common shares. 2. There are no options or warrants outstanding to purchase common shares. 3. There are no convertible debt securities. 4. Activity in common shares during the year was as follows: Outstanding, Jan. 1 1,285,000 Treasury shares acquired, Oct. 1 (250.000) 1,035,000 Shares reissued, Dec. 1 165.000 Outstanding. Dec. 31 1.200.000 Required (1) On the basis of the information above, do you agree with the controller's computation of earnings per share (EPS) for the year? If you disagree prepare a revised computation of earnings per share. (20 marks) (11) What affect do share dividends or share splits have on the computation of the weighted average number of share outstanding? Explain (5 marks) (20 + 5 = 25 marks)