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P2-D2.
P2-D2.-
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Nikitagarwal
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An entity, with a year-end of 31 December 20X8, issued 200,000 shares
at full market price of $3 on 1 July 20X8.
Relevant information
20X8 20X7
Profit attributable to the ordinary
shareholders for the year ending
31 December $550,000 $460,000
Number of ordinary shares in issue at
31 December 1,000,000 800,000
Required:
Calculate the EPS for each of the years.I got the correct answer here however I want to understand if doing 6/12 is even relevant here , doing it for shares ? and if it is correcting on basis of accounting why is it ?
please explain
P2-D2
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It is the adjustment for the shares being issued on 1 July and being in issue for six-months up to the 31 December reporting date. I’d recommend that you watch the EPS videos to get a full understanding and come back if you are still unsure.
Thanks
Nikitagarwal
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