Question
In: Accounting
Compaq Ltd has a net income after tax of $2 000 000 for the year ended...
Compaq Ltd has a net income after tax of $2 000 000 for the year ended 30 June 2018. At the beginning of the period Compaq Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 January 2018 Compaq Ltd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March 2018 Compaq Ltd made a one-for-five bonus issue of ordinary shares out of retained earnings. The last sale price of an ordinary share before the bonus issue was $2.50. At the beginning of the current period Compaq Ltd also had 500 000, $1.00, 5% cumulative preference shares on issue. The dividends on the preference shares are not treated as expenses in the statement of comprehensive income. The basic earnings per share for the period ended 30 June 2017 was $1.50 per share.
Required: a) Calculate the basic EPS amount for 2018.
b) Explain what is diluted EPS. Give one example of a security that can dilute the basic EPS.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Compaq Ltd has a net income after tax of $2 000 000 for the year ended...
Compaq Ltd has a net income after tax of $2 000 000 for the year
ended 30 June 2018. At the beginning of the period Compaq Ltd has
900 000 fully paid-up ordinary shares on issue. On 1 January 2018
Compaq Ltd had issued a further 300 000 fully paid-up ordinary
shares at an issue price of $2.00. On 1 March 2018 Compaq Ltd made
a one-for-five bonus issue of ordinary shares out of retained
earnings. The last sale price...
Alps Ltd has a net income after tax of $1 500 000 for the year ended...
Alps Ltd has a net income after tax of $1 500 000 for the year
ended 30 June 2019. At the beginning of the period Alps Ltd has 900
000 fully paid-up ordinary shares on issue. On 1 December 2018 Alps
Ltd had issued a further 300 000 fully paid-up ordinary shares at
an issue price of $2.00. On 1 March 2019 Alps Ltd made a
one-for-six bonus issue of ordinary shares out of retained
earnings. The last sale price...
Week 9 Alps Ltd has a net income after tax of $1 500 000 for the...
Week 9 Alps Ltd has a net income after tax of $1 500 000 for the
year ended 30 June 2019. At the beginning of the period Alps Ltd
has 900 000 fully paid-up ordinary shares on issue. On 1 December
2018 Alps Ltd had issued a further 300 000 fully paid-up ordinary
shares at an issue price of $2.00. On 1 March 2019 Alps Ltd made a
one-for-six bonus issue of ordinary shares out of retained
earnings. The last...
Week 9 Alps Ltd has a net income after tax of $1 500 000 for the...
Week 9
Alps Ltd has a net income after tax of $1 500 000 for the year
ended 30 June 2019. At the beginning of the period Alps Ltd has 900
000 fully paid-up ordinary shares on issue. On 1 December 2018 Alps
Ltd had issued a further 300 000 fully paid-up ordinary shares at
an issue price of $2.00. On 1 March 2019 Alps Ltd made a
one-for-six bonus issue of ordinary shares out of retained
earnings. The last...
After-Tax Profit Targets Olivian Company wants to earn $300,000 in net (after-tax) income next year. Its...
After-Tax Profit Targets
Olivian Company wants to earn $300,000 in net (after-tax) income
next year. Its product is priced at $400 per unit. Product costs
include:
Direct materials
$120.00
Direct labor
$88.00
Variable overhead
$20.00
Total fixed factory overhead
$450,000
Variable selling expense is $16 per unit; fixed selling and
administrative expense totals $300,000. Olivian has a tax rate of
40 percent.
Required:
1. Calculate the before-tax profit needed to
achieve an after-tax target of $300,000.
$
2. Calculate the...
After-Tax Profit Targets Olivian Company wants to earn $300,000 in net (after-tax) income next year. Its...
After-Tax Profit
Targets Olivian Company wants to earn $300,000 in net
(after-tax) income next year. Its product is priced at $250 per
unit.
Product costs include:
Direct materials $75.00
Direct labor $55.00
Variable overhead $12.50
Total fixed factory overhead $445,000
Variable selling expense is $10 per unit; fixed selling and
administrative expense totals $295,000. Olivian has a tax rate of
40 percent.
Required: 1. Calculate the before-tax profit needed to achieve
an after-tax target of $300,000. $
2. Calculate the...
After-Tax Profit Targets Olivian Company wants to earn $360,000 in net (after-tax) income next year. Its...
After-Tax Profit Targets
Olivian Company wants to earn $360,000 in net (after-tax) income
next year. Its product is priced at $350 per unit. Product costs
include:
Direct materials
$105.00
Direct labor
$77.00
Variable overhead
$17.50
Total fixed factory overhead
$410,000
Variable selling expense is $14 per unit; fixed selling and
administrative expense totals $260,000. Olivian has a tax rate of
40 percent.
Required:
1. Calculate the before-tax profit needed to
achieve an after-tax target of $360,000.
$
2. Calculate the...
After-Tax Profit Targets Olivian Company wants to earn $420,000 in net (after-tax) income next year. Its...
After-Tax Profit Targets Olivian Company wants to earn $420,000
in net (after-tax) income next year. Its product is priced at $275
per unit. Product costs include: Direct materials $90 Direct labor
$65 Variable overhead $16 Total fixed factory overhead $440,000
Variable selling expense is $14 per unit; fixed selling and
administrative expense totals $290,000. Olivian has a tax rate of
40 percent. Required:
1. Calculate the before-tax profit needed to achieve an
after-tax target of $420,000.
2. Calculate the number...
Tiger Limited has profit before tax of R250 000 for the year ended 31 December 2019....
Tiger Limited has profit before tax of R250 000 for the year
ended 31 December 2019. When calculating this figure, the following
information was correctly accounted for:
Ø Telephone payment of R5 000 is due for 2019 but has not yet
been paid (deductible for tax purposes in the current year).
Ø Unearned sales income of R18 000 received in advance in
respect of 2020 (taxable in the current year).
Ø Interest income of R7 000 is receivable (taxable in...
Bagwell's net income for the year ended December 31, Year 2 was $199,000. Information from Bagwell's...
Bagwell's net income for the year ended December 31, Year 2 was
$199,000. Information from Bagwell's comparative balance sheets is
given below. Compute the cash received from the sale of its common
stock during Year 2.
At December 31
Year 2
Year 1
Common Stock, $5 par value
$
514,000
$
462,600
Paid-in capital in excess of par
962,000
865,600
Retained earnings
702,000
594,600
Multiple Choice
$51,400.
$199,000.
$107,400.
$96,400.
$147,800.
Glaston Company manufactures a single product using a JIT...
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