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  • 1.  PART 2. PER SHARE RATIOS QUESTION

    Posted 23 days ago
    Dear CMA Friends,

    I couldnt understand the answer of this question. I would be glad should anyone can help me in solving.

    Question: A Co. had 150.000 shares outstanding on Jan 1. On March 1, 75.000 additional shares were issued through a stock dividend. Then on Nov. 1 the Co. issued 60.000 shares for cash. The number of shares to be used in the denomiator of the EPS calculation for the year is;

    Correct answer is 235.000 shares

    Kind regards

    ------------------------------
    TIMUCIN ONER
    Director/Manager
    ANTALYA
    Turkey
    ------------------------------


  • 2.  RE: PART 2. PER SHARE RATIOS QUESTION

    Posted 22 days ago
    Hi,

    Calculation for your answer will be as follows:

    A). Already o/s shares (150000*12/12)= 150000
    B). (+) Stock Dividend (75000*12/12)= 75000
    C). (+) Fresh Issue for cash (60000*2/12)= 10000

    Total Eqv nos. Shares o/s= 235000 sh.
    (A+B+C)

    ^Since stock dividend is given without any consideration received for it so it would be considered for whole year.
    ^ Since fresh Issue were raised on November 1st so funds utilised for 2 months only therefore prorated nos. of shares for 2 months only.
    ^Already o/s shares were used whole years therefore considered for 12 months.


    Hope this solved all your queries with this question.

    Best
    Tushar