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exercise-BEPS

exercises

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Angel Anne Lorraine A. Carranza
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131 views4 pages

exercise-BEPS

exercises

Uploaded by

Angel Anne Lorraine A. Carranza
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BASIC EARNINGS PER SHARE (BEPS)

EXERCISES
-oOo-

PROBLEM 1
For the year 2023, HOPPER Company has earned net income of P1,600,000. The
Company has maintained 400,000 outstanding ordinary shares during the whole 2023.
In addition, the Company has also maintained 50,000, 8%, preference shares with P40
par value.
On December 31, 2023, the corresponding dividends to preference shares were
declared and P800,000 dividends were declared for ordinary shares. The Company last
paid dividends during 2020.
Required: Under each of the following independent scenarios, determine the amount of
BEPS for the year 2023:
1. Preference shares are noncumulative.
2. Preference share are cumulative.
PROBLEM 2
GRASS Company earned net income of P3,500,000 during the year 2023. Weighted
average number of outstanding ordinary shares was 250,000, while there were 40,000,
9%, P60 par value preference shares outstanding all throughout the year.
No preference nor ordinary dividends were declared since the year 2021 until the
current year 2023.
Required: Under each of the following independent scenarios, determine the amount of
BEPS for the year 2023:
1. Preference shares are noncumulative
2. Preference shares are cumulative
PROBLEM 3
At the beginning of the year 2023, CHAIN Company had 250,000 outstanding shares.
Share transactions for the year 2023 are the following:
Date Transactions
03/01/23 Issued 30,000 new shares for cash
05/01/23 Purchased 60,000 shares to be held in treasury
06/30/23 Reissued 40,000 of the treasury shares for a land
08/31/23 Issued 24,000 new shares for cash
Net income for 2023 amounted to P2,150,000.
Required: Determine the amount of BEPS for the year 2023.
PROBLEM 4
On January 1, 2023, SUGAR Company has 180,000 outstanding shares. Net income
earned for the year amounted to P2,800,000. Ordinary share transactions for the year
are the following:
Date Transactions
02/01/23 Purchased 12,000 shares to be held in treasury
04/01/23 Received subscriptions for 30,000 shares
06/01/23 Received the full payment for the 04/01 subscription
09/30/23 Reissued 6,000 of the treasury shares
11/30/23 Issued 36,000 new shares for cash

Aside from the ordinary shares, the Company also maintained 5% cumulative
preference shares with total par value of P2,500,000. On December 31, 2023, the
Company declared the dividends due on preference shares and ordinary dividends
amounting to P750,000. The last time that the Company paid dividends was during
2021.
Required: Determine the amount of BEPS for the year 2023.
PROBLEM 5
On January 1, 2023, SUPERNOVA Company had 380,000 outstanding ordinary shares.
Ordinary share transactions during the year 2023 are the following:
Date Transactions
03/31/23 Purchased 20,000 shares to be held in treasury
06/01/23 Issued 45,000 shares for cash
07/01/23 Instituted a 2-for-1 share split up
10/31/23 Reissued 15,000 of the treasury shares
12/01/23 Issued 12,000 new shares for cash

Net income earned during the year 2023 amounted to P1,450,000.


Required: Determine the amount of BEPS for the year 2023.
PROBLEM 6
On January 1, 2023, CHANDELIER Company had 640,000 outstanding ordinary
shares. Ordinary share transactions during the year 2023 are the following:
Date Transactions
01/31/23 Issued 120,000 new shares for cash
04/01/23 Purchased 50,000 shares to be held in treasury
07/01/23 Declared 20% share dividends
08/01/23 Reissued 30,000 of the treasury shares
09/01/23 Retired the remaining treasury shares
09/30/23 Declared 10% share dividends
11/30/23 Issued 24,000 new shares for cash

Net income earned during the year 2023 amounted to P4,450,000, while dividends paid
for ordinary shares amounted to P2,700,000.
Required: Determine the amount of BEPS for the year 2023.
PROBLEM 7
On January 1, 2023, PAYPHONE Company had 530,000 outstanding ordinary shares.
Net income earned during the year 2023 amounted to P3,300,000, while ordinary share
transactions for the year are the following:
Date Transactions
02/28/23 Purchased 45,000 shares to be held in treasury
05/01/23 Reissued 27,000 of the treasury shares
06/30/23 Declared 30% share dividends
07/31/23 Issued 36,000 shares for cash
08/31/23 Executed a 3-for-1 share split-up
10/01/23 Issued 40,000 shares for a land
10/31/23 Declared 8% share dividends
11/30/23 Purchased and immediately retired 15,000 shares

Required: Determine the amount of BEPS for the year 2023.


PROBLEM 8
HONEYBUNCH Company had 540,000 outstanding ordinary shares as of January 1,
2023. Ordinary share transactions that may be relevant are arranged chronologically as
follows:
Date Transactions
02/01/23 Issued 90,000 new shares for cash
03/31/23 Purchased 40,000 shares to be held in treasury
06/30/23 Declared 10% share dividends
09/01/23 Reissued 25,000 of the treasury shares
01/01/24 Declared 20% share dividends
02/28/24 Issued 60,000 new shares for cash
05/30/24 Executed 2-for-1 share split-up

Net income for 2023 amounted to P6,250,000, while the 2023 financial statements were
authorized for issue on April 1, 2024.

Required: Determine the amount of BEPS for the year 2023.


PROBLEM 9
For the year 2023, DADDY Company’s total revenues amounted to P12,000,000, while
its total expenses amounted to P12,600,000. The Company had 350,000 outstanding
ordinary shares as of January 1, 2023.

There were no other ordinary share transactions during the year, except for additional
issuance of 80,000 new shares last September 30, 2023. In addition, the Company also
had 9% preference shares with total par value of P3,000,000. No dividends were
declared since 2022.

Required: Determine the amount of Basic Loss per share for the year 2023 assuming:
1. Preference shares are noncumulative.
2. Preference share are cumulative.

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