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Weighted average number of shares (EPS)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Weighted average number of shares (EPS)

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by AvatarMikeLittle.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • September 15, 2015 at 8:38 pm #272046
    Avatar3mr
    Participant
    • Topics: 24
    • Replies: 39
    • ☆☆

    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

    September 16, 2015 at 9:02 am #272092
    AvatarMikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23368
    • ☆☆☆☆☆

    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?

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