In: Accounting
Leek Co’s profit for the year ended 31 December 2018 was €1,500,000. On 1 January 2018 Leek Co had 500,000 ordinary shares outstanding. On 1 July 2018 there was a full market price issue of 200,000 additional shares. In addition the company has one potentially convertible security: €800,000 of 5% convertible bonds, convertible into a total of 200,000 shares. Assuming a tax rate of 30%, calculate the company’s basic and diluted EPS.
For calculating the basic EPS the weighted average number of shares for the year ended 31 December 2018 is ["900,000", "700,000", "600,000"]
The Basic EPS is ["€2.50", "€1.67", "€2.14"]
The restated profit for calculated the Diluted EPS is ["1,512,000", "1,528,000", "1,540,000"]
The number of shares for calculating the Diluted EPS is ["800,000", "900,000", "700,000"]
The diluted EPS is ["€1.91", "€1.71", "€1.88"]
The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.