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Chapter 15
Earnings Per Share
NAME: Date:
Professor: Section: Score:
QUIZ:
1. What is the correct treatment of a stock dividend (share dividend) issued in mid-year when
computing the weighted-average number of common (ordinary) shares outstanding for earnings
per share purposes?
a. The stock dividend should be weighted by the length of time that the additional number of
shares are outstanding during the period.
b. The stock dividend should be included in the weighted-average number of common shares
outstanding only if the additional shares result in a decrease of 3 percent or more in earnings
per share.
c. The stock dividend should be weighted as if the additional shares were issued at the beginning
of the year.
d. The stock dividend should be ignored since no additional capital was received.
2. When computing diluted earnings per share, stock options are
a. considered only if they are dilutive.
b. considered only if they are antidilutive.
c. considered only if they were exercised.
d. ignored.
3. Mail Co.'s issued and outstanding share capital throughout the period consists of 500,000 ordinary
shares of ₱0.20 par and 80,000 preference shares of ₱1 par. Profit after tax for the period is ₱320,000
and the preference dividend is ₱8,000. Basic EPS for the period is:
a. 0.602 b. 0.624 c. 0.642 d. 0.660
4. Jack Co. has the following share capital outstanding during 20x1 and 20x2:
Preference shares, ₱100 par, 10% cumulative 2,000,000
Ordinary shares, ₱50 par 5,000,000
Jack reported profit of ₱4,000,000 for the year ended December 31, 20x2. Jack paid no preferred
dividends during 20x1 and paid ₱200,000 in preferred dividends during 20x2. What basic earnings per
share is presented in Jack Co.’s December 31, 20x2 statement of profit or loss?
a. 42.00 b. 38.00 c. 37.60 d. 36.70
5. On 1 January 2015, N-Stall, Inc.'s issued share capital consisted of 120,000 ordinary shares of ₱1. On
1 May 2015, N-Stall issued another 30,000 ordinary shares and on 1 July 2015 N-Stall issued a
further 50,000 shares. Both issues were made at full market price. The weighted average number of
shares outstanding during the year to 31 December 2015 was:
a. 165,000 b. 166,340 c. 167,500 d. 168,000
6. A company's profit after tax for the year to 30 June 2016 was ₱10,000,000. The company's issued
share capital at 1 July 2015 consisted of 2,400,000 ordinary shares of ₱0.50 par each. A further
300,000 shares were issued at full market price on 1 September 2015. Basic EPS for the year is:
Chapter 15
Earnings Per Share
NAME: Date:
Professor: Section: Score:
QUIZ:
1. What is the correct treatment of a stock dividend (share dividend) issued in mid-year when
computing the weighted-average number of common (ordinary) shares outstanding for earnings
per share purposes?
a. The stock dividend should be weighted by the length of time that the additional number of
shares are outstanding during the period.
b. The stock dividend should be included in the weighted-average number of common shares
outstanding only if the additional shares result in a decrease of 3 percent or more in earnings
per share.
c. The stock dividend should be weighted as if the additional shares were issued at the beginning
of the year.
d. The stock dividend should be ignored since no additional capital was received.
2. When computing diluted earnings per share, stock options are
a. considered only if they are dilutive.
b. considered only if they are antidilutive.
c. considered only if they were exercised.
d. ignored.
3. Mail Co.'s issued and outstanding share capital throughout the period consists of 500,000 ordinary
shares of ₱0.20 par and 80,000 preference shares of ₱1 par. Profit after tax for the period is ₱320,000
and the preference dividend is ₱8,000. Basic EPS for the period is:
a. 0.602 b. 0.624 c. 0.642 d. 0.660
4. Jack Co. has the following share capital outstanding during 20x1 and 20x2:
Preference shares, ₱100 par, 10% cumulative 2,000,000
Ordinary shares, ₱50 par 5,000,000
Jack reported profit of ₱4,000,000 for the year ended December 31, 20x2. Jack paid no preferred
dividends during 20x1 and paid ₱200,000 in preferred dividends during 20x2. What basic earnings per
share is presented in Jack Co.’s December 31, 20x2 statement of profit or loss?
a. 42.00 b. 38.00 c. 37.60 d. 36.70
5. On 1 January 2015, N-Stall, Inc.'s issued share capital consisted of 120,000 ordinary shares of ₱1. On
1 May 2015, N-Stall issued another 30,000 ordinary shares and on 1 July 2015 N-Stall issued a
further 50,000 shares. Both issues were made at full market price. The weighted average number of
shares outstanding during the year to 31 December 2015 was:
a. 165,000 b. 166,340 c. 167,500 d. 168,000
6. A company's profit after tax for the year to 30 June 2016 was ₱10,000,000. The company's issued
share capital at 1 July 2015 consisted of 2,400,000 ordinary shares of ₱0.50 par each. A further
300,000 shares were issued at full market price on 1 September 2015. Basic EPS for the year is:
