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A531-6UFS

# A531-6UFS - Requirement(a The method the controller has...

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Requirement (a) The method the controller has used to calculate EPS for the year is not accurate. The Name: Umme Fatema Siddique Student Number: 805 936 291 Course Code/Number: ACCT 531 Assignment Number: 6 1-Jan 1,285,000 0.75 963,750 1-Oct 1,035,000 0.1666667 172,500 1-Dec 1,200,000 0.0833333 100,000 Weighted Average number of shares 1,236,250 The correct EPS would be: Net Income \$3,374,960 = \$2.73 Number of Shares 1,236,250 Requirement (b) In this case, we will calculate both the basic EPS and the Diluted EPS using the same Basic EPS Diluted EPS Average number of shares outstanding under option: 140,000 Option price per share x \$20 Proceeds upon exercise of options \$1,400,000 Average market price of common shares \$20 Treasury shares that could be repurchased with proceeds (\$1,400,000/\$20) 70,000 Excess of shares under option over the treasury shares that could be repurchased (140,000 - 70,000) 70,000 Potential common incremental shares 70,000 Average number of common shares outstanding 1,236,250 1,236,250 Total average number of common shares outstanding and potential common shares 1,236,250 (A) 1,306,250 (C) Net Income for the Year \$3,374,960 (B) \$3,374,960 (D) Earnings Per Share \$2.73 (B/A) \$2.58 (D/C)

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A531-6UFS - Requirement(a The method the controller has...

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