Book value per share

1. T Company reported the following shareholders’ equity on Dec 31, 2015:

Preference share capital – 12%, P50 par, 20,000 shares 1,000,000
Ordinary Share Capital, P25 par, 100,000 shares 2,500,000
Share Premium 200,000
Retained Earnings 400,000
Retained Earnings Appropriated 100,000
Revaluation Surplus 300,000
Dividends on Preference share have not been paid since 2013. The preference share has a
liquidating value of P55 and call price of P58.
What is the book value per preference share?
a. 61 b. 56 c. 55 d. 58

2. H Company reported the following shareholders’ equity at year-end:

5% cumulative preference share capital, par value P100 per share; 25,000 2,500,000
shares issued and outstanding
ordinary share capital, par value P35 per share; 100,000 shares issued and 3,500,000
outstanding
Share Premium 1,250,000
Retained Earnings 3,000,000

Dividends in arrears on the preference share amounted to P250,000. If the entity were to be
liquidated, the preference shareholders would receive par value plus a premium of P500,000.
What is the book value per ordinary share?
a. 77.50 b. 75 c. 72.50 d. 70

3. D Company reported the following shareholders’ equity on December 31, 2015:

8% cumulative preference share capital, P50 par; liquidating value P55 per 1,000,000
share; authorized, issued and outstanding 20,000 shares
Ordinary share capital, P25 par; 200,000 shares authorized; 100,000 shares 2,500,000
issued and outstanding
Retained Earnings 400,000
Dividends on preference shares have been paid through 2013 but have not been declared for
2014 and 2015.
On Dec 31, 2015, what is the book value per ordinary share?
a. 25 b. 27.20 c. 26.40 d. 29

4. D
5. Nike Company paid cash dividends of P600,000 and reported net income of P1,550,000. The
ordinary shareholders’ equity at year-end was P5,000,000 and the entity had 200,000 ordinary
shares outstanding.
What is the book value per ordinary share?
a. 25 b. 22 c. 3 d. 7.75
6. D
7. L Company provided the following information for 2014 and 2015:
Ordinary Shareholders’ equity, 12/31/14 4,400,000
Ordinary Shareholders’ equity, 12/31/15 5,000,000
Outstanding ordinary shares, 12/31/15 160,000
Preference Dividends paid for 2015 100,000
What is the book value ordinary share for 2015?
a. 27.50 b. 31.25 c. 30.62 d. 26.88
8. D
9. D
10. D
11. D
12. D
13. D
14. D
15. D
16. D
17. D
18. D
19. D
20. d
BASIC EARNINGS PER SHARE (simple Problems)

1. On Dec 31, 2015 and 2014, G Company had 100,000 ordinary shares and 10,000 cumulative
preference shares of 5%, P100 par value. No dividends were declared on either the preference
or ordinary share in 2015 or 2014. Net income for the current year was P900,000.
a. 8.50 b. 9.50 c. 9.00 d. 5.00

2.
3. e
4. e
5. C Company reported in the financial statements for the year ended Dec 31, 2015 basic earnings
per share of P85. On July 1, 2016, the entity made a 3 for 1 bonus issue.
What amount of earnings per share for 2015 should be reported as comparative information in
the financial statements for 2016?
a. 21.25 b. 37.50 c. 34 d. 28.30

6. e
7. e
8. During the current year, Innova Company had outstanding 200,000 ordinary shares and 20,000
cumulative preference shares with a P10 per share dividend. Each preference share is
convertible in five ordinary shares. The entity had a P3,000,000 net loss for the year. No
dividends were paid or declared.
What amount should be reported as basic loss per share?
a. 15 b. 16 c. 10 d. 10.67
9. e
10. e
11. e
12. e
13. On Jan 1, 2015, G Company had 300,000 ordinary shares outstanding, P100 par or total par
value of P30,000,000. During 2015, the entity issued rights to acquire one ordinary share at
P100 in the ratio of one share for every 5 shares held. The rights are exercised on March 31,
2015. The market value of each ordinary share immediately prior to March 31, 2015 was P160.
The net income for 2015 was P6,000,000.

What amount should be reported as basic earnings per share?

a. 17.14 b. 16.67 c. 18.75 d. 17.39

14. E Company had 600,000 ordinary shares outstanding on Jan 1, 2015. During 2015, the entity
issued rights to acquire one ordinary share at P10 in the ratio of one new share for every 4
shares outstanding. The market value of the ordinary share immediately prior to the rights issue
is P35. The rights were exercised on Oct 1, 2015. The net income for the year is P8,550,000.
What amount should be reported as basic earnings per share?
a. 11.40 b. 12.00 c. 14.25 d. 13.41
 BASIC EARNINGS PER SHARE (Average Shares)
1. M Company had 100,000 equity shares in issue on Jan 1, 2015. On July 1, 2015, the entity issued
20,000 new shares by way of a 1 for 5 bonus. On Oct 1, 2015, the entity issued 28,000 new
shares for cash at full market price.
When calculating basic earnings per share, what is the average number of shares?
a. 100,000 b. 117,000 c. 148,000 d.127,000

2. On Dec 31, 2015, P Company had 500,000 ordinary shares issued and outstanding, 400,000 of
which had been issued and outstanding throughout the year and 100,000 of which were issued
on Oct 1, 2015. Net income for the year was P5,100,000.
What amount should be reported as basic earnings per share?
a. 10.10 b. 12.75 c. 12 d. 11.35

3. P company had a profit after tax of P15,000,000 for 2015. The following appropriations have not
been considered in this amount:

Arrears of cumulative preference dividend for 2 years 4,000,000

Ordinary Dividends 5,000,000
Preference Share Premium payable on Redemption 1,000,000
Exceptional profit, net of tax 4,000,000
The entity had 3,000,000 ordinary shares of P1 par value outstanding on Jan 1, 2015. The
following share transactions occurred during the current year:

Jan 1 Issued at P5 per share, P1 paid to date and entitled to participate in 250,000
dividends to the extent paid up
April 1 Full market price P3 per share issue 600,000
July 1 Purchase of own shares at P3.50 per share 400,000
What amount should be reported as basic earnings per share?

a. 4.85 b. 4.57 c. 3.64 d. 3.94

4. D
5. R Company had 20,000 ordinary shares outstanding on Jan 1, 2015. On May 1, 2015, the entity
issued 10,500 ordinary shares. Outstanding all year were 10,000 nonconvertible and
noncumulative preference shares on which the annual dividend of P40 per share was paid in
Dec 2015. Net income was P967,000.
What amount should be reported as basic earnings per share?
a. 18.60 b. 21 c. 28.40 d. 35.80
6. D
7. D
8. D
9. D
10. D
11. D
12. D
13. D

W Company had 250,000 ordinary shares outstanding on Jan 1, 2015. During 2015 and 2016, the
following transactions took place.

2015 March 1 Sold 24,000 shares

July 1 Issued a 20 percent stock dividend
 Oct 1 Sold 16,000 shares
Dec 1 Purchased 15,000 shares to be held in treasury
2016 June 1 3 for 1 share split
Sept 1 Sold 60,000 shares
14. What is the weighted average number of shares for 2015 to be used in the earnings per share
computation for comparative financial statements at the end of 2016?
a. 980,250 b. 329,800 c. 984,000 d. 969,000
15. What is the weighted average number of shares for 2016 to be used in the earnings per share
computation for comparative financial statements at the end of 2016?
a. 1,009,400 b. 1,049,400 c. 1,169,400 d. 989,400
DILUTED EARNINGS PER SHARE Comprehensive Problems

1. D
2. Newtown Company had earnings per share of P120 for the current year, before taking any
dilutive securities
3. D
4. D
5. D
6. D
7. D
8. D
9. D
10. D
11. D
12. D
13. D
14. D
15. D
16. D
17. D
18. D
19. d