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Chapter 24

Chapter 14

Example 1

Full market value

Robert had 6,000 ordinary shares in issue on 1 January 20X3.

On 1 April 20X3 Robert issued 1,500 shares at full market value.

Robert’s earnings for the year to 31 December 20X3 were $1,200.

Required:

Calculate Robert’s earnings per share for the year to 31 December 20X3.

Solution

No of shares Fraction of Weighted
year held average
b/f 6,000 × 3 / 12 1,500

Issue 1,500

———–—
Total 7,500 × 9 / 12 5,625
———–— ———–—

7,125
———–—

Earnings per share = 1,200 ÷ 7,125 = 16.8¢

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