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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Weighted average number of shares (EPS)
Hello
I am here again with a practical question about EPS that drove a huge debate in the office today 😀
A company is issuing its interim financial statement in 30/6/2015.
Beginning number of ordinary shares is 162,500. Issued 37,500 ordinary shares (for cash) on 30/4/2015.
What is the weighted average number of ordinary shares as at 30/6/2015?
A team says that we need to divide the 2 months (time of capital in business) over six months to know the actual share of the capital increase in the profit of the period.
So: 37,500*(2/6) = 12,500
While the other team thinks that the issued shares should be multiplied by (2/12).
Kindly discuss the acceptability of this accounting treatments
My calculation says it’s 162,500 x 4/6 + 200,000 x 2/6
This works out to 108,333 + 66,667 …. a total of 175,000
Does that help?