ºÝºÝߣ

ºÝºÝߣShare a Scribd company logo

Exercises Financial Accounting - Dilutive Securities & EPS

•
•
Fabiola Kristi
Fabiola Kristi

This document provides multiple problems related to dilutive securities and earnings per share (EPS) calculations. It includes questions about convertible bonds, convertible preference shares, share warrants, share option plans, restricted shares, weighted average shares outstanding, and EPS calculations. Specifically, it asks the reader to calculate journal entries, weighted average shares, and basic and diluted EPS based on given share transactions and financial information for a company called Afika.

1 of 2
Download to read offline
SOAL ASISTENSI AKUNTANSI KEUANGAN 2 DILUTIVE SECURITIES & EPS Dosen: Ibu Dini Marina | Asdos: Fabiola Kristi | Pertemuan 3 | Page 1 UNIVERSITAS INDONESIA FAKULTAS EKONOMI DEPARTEMEN AKUNTANSI PROBLEM 1 Convertible Bonds On January 1 20x1, Afika Company issued 12% convertible bond at par, with face value of Rp 10,000,000 maturing on January 1 20x6. The bond is convertible into one ordinary share for each Rp 10,000 bond (par value of the ordinary share is Rp 1,000) Interest is payable semiannually. At January 1 20x2, Afika could have issued non-convertible debt with a 5 year term bearing an interest rate 15%. 1. Prepare the journal entry to record the issuance of the convertible bond on January 1 20x1. 2. Prepare the journal entry if the convertible bond is a) Converted at Maturity Date b) Converted at January 1 20x2 c) Repurchased at January 1 20x2 for Rp 11,500,000. At the date of repurchase Afika could have issued non-convertible bond at Rp 10,750,000 Convertible Preference Shares Afika issued 1,000 shares of Rp 5,000 par value preference shares at market value Rp 7,500 per share. Each preference shares is convertible into 4 ordinary shares (par value of ordinary share is Rp 1,000) The market price of ordinary share is Rp 2,500. Record the issuance and conversion of preference shares! What if the preference shares are repurchased? Share Warrants Afika has decided to raise additional capital by issuing Rp 12,000,000 face value bonds with 5 year maturity at a coupon rate 10%. Interest is payable annually. The share warrants should be issued at the rate of one warrant for each Rp 100,000 bond. One detachable warrant can be used to buy 5 ordinary shares at Rp 2,000 (Rp 1,000 par) The market rate for equivalent bonds without share warrant is 12%. The cash receipt from the issuance is Rp 12,250,000 1. What entry should be made at the time of the issuance of the bonds plus share warrants? 2. Record journal entry if half of the warrants are excercised. The market price of ordinary share is Rp 2,200 Share Option Plans On September 30, 20x1, Afika decide to use share option plan that granted option to executives to purchase 5,000 shares of company’s Rp 1,000 par value. The options were granted at January 4 20x2 and were vested 3 years after the grant date (If the grantee is still employed) The options expired 5 years from grant date. The option price was Rp 1,500 and the fair value option pricing model determines the total compensation expense to be Rp 15,000,000
SOAL ASISTENSI AKUNTANSI KEUANGAN 2 DILUTIVE SECURITIES & EPS Dosen: Ibu Dini Marina | Asdos: Fabiola Kristi | Pertemuan 3 | Page 2 UNIVERSITAS INDONESIA FAKULTAS EKONOMI DEPARTEMEN AKUNTANSI ¾ of the options were excercised during 20x6 ;2,000 on February 29 when the market price is Rp 2,150 and 1,750 on August 31 when the market price is Rp 2,450. Prepare the journal entries relating to the share option plans for 20x2, 20x3, 20x4, and 20x6! Restricted Share Afika issues 3,000 restricted shares for her CFO on June 31 20x2. The shares have a fair value Rp 2,200. The service and vesting period relates to these restricted shares is 3 years. The par value is Rp 1,000. Prepare the journal entries to recordthe restricted shares on June 31, and December 31 20x2. Prepare the journal entry if the CFO is resigned at January 20x3! Weighted Average Shares Outstanding Below is the summary of Afika ordinary share activities : Dates Share Changes Share Outstanding January 1 Beginning Blance 30,000 February 29 Issued 20,000 shares 20,000 May 1 Purchased 5,000 treasury shares (5,000) July 31 Issued 10,000 shares 10,000 October 1 2-for-1 share split 55,000 December 31 Ending Balance 110,000 Compute the weighted average shares outstanding! Earnings Per Share Using the weighted average shares outstanding above, compute the basic and diluted EPS using following information 1. 6% Convertible bond at par, with face value of Rp 10,000,000. The fair value of liability component at year end is Rp 9,600,000. The convertible bond can be converted to 10,000 Shares in total. Market rate of equivalent non-convertible bond is 10% 2. 8%, Rp 5,000,000 preference shares convertible to 2,000 shares 3. 30,000 warrants are outstanding. 2 of warrants could be excercised to purchase one ordinary share for Rp 1,500. 4. Afika’s net income is Rp 15,000,000. Market price at year end is Rp 2,100 and tax rate 25%.

More Related Content

Exercises Financial Accounting - Dilutive Securities & EPS

  • 1. SOAL ASISTENSI AKUNTANSI KEUANGAN 2 DILUTIVE SECURITIES & EPS Dosen: Ibu Dini Marina | Asdos: Fabiola Kristi | Pertemuan 3 | Page 1 UNIVERSITAS INDONESIA FAKULTAS EKONOMI DEPARTEMEN AKUNTANSI PROBLEM 1 Convertible Bonds On January 1 20x1, Afika Company issued 12% convertible bond at par, with face value of Rp 10,000,000 maturing on January 1 20x6. The bond is convertible into one ordinary share for each Rp 10,000 bond (par value of the ordinary share is Rp 1,000) Interest is payable semiannually. At January 1 20x2, Afika could have issued non-convertible debt with a 5 year term bearing an interest rate 15%. 1. Prepare the journal entry to record the issuance of the convertible bond on January 1 20x1. 2. Prepare the journal entry if the convertible bond is a) Converted at Maturity Date b) Converted at January 1 20x2 c) Repurchased at January 1 20x2 for Rp 11,500,000. At the date of repurchase Afika could have issued non-convertible bond at Rp 10,750,000 Convertible Preference Shares Afika issued 1,000 shares of Rp 5,000 par value preference shares at market value Rp 7,500 per share. Each preference shares is convertible into 4 ordinary shares (par value of ordinary share is Rp 1,000) The market price of ordinary share is Rp 2,500. Record the issuance and conversion of preference shares! What if the preference shares are repurchased? Share Warrants Afika has decided to raise additional capital by issuing Rp 12,000,000 face value bonds with 5 year maturity at a coupon rate 10%. Interest is payable annually. The share warrants should be issued at the rate of one warrant for each Rp 100,000 bond. One detachable warrant can be used to buy 5 ordinary shares at Rp 2,000 (Rp 1,000 par) The market rate for equivalent bonds without share warrant is 12%. The cash receipt from the issuance is Rp 12,250,000 1. What entry should be made at the time of the issuance of the bonds plus share warrants? 2. Record journal entry if half of the warrants are excercised. The market price of ordinary share is Rp 2,200 Share Option Plans On September 30, 20x1, Afika decide to use share option plan that granted option to executives to purchase 5,000 shares of company’s Rp 1,000 par value. The options were granted at January 4 20x2 and were vested 3 years after the grant date (If the grantee is still employed) The options expired 5 years from grant date. The option price was Rp 1,500 and the fair value option pricing model determines the total compensation expense to be Rp 15,000,000
  • 2. SOAL ASISTENSI AKUNTANSI KEUANGAN 2 DILUTIVE SECURITIES & EPS Dosen: Ibu Dini Marina | Asdos: Fabiola Kristi | Pertemuan 3 | Page 2 UNIVERSITAS INDONESIA FAKULTAS EKONOMI DEPARTEMEN AKUNTANSI ¾ of the options were excercised during 20x6 ;2,000 on February 29 when the market price is Rp 2,150 and 1,750 on August 31 when the market price is Rp 2,450. Prepare the journal entries relating to the share option plans for 20x2, 20x3, 20x4, and 20x6! Restricted Share Afika issues 3,000 restricted shares for her CFO on June 31 20x2. The shares have a fair value Rp 2,200. The service and vesting period relates to these restricted shares is 3 years. The par value is Rp 1,000. Prepare the journal entries to recordthe restricted shares on June 31, and December 31 20x2. Prepare the journal entry if the CFO is resigned at January 20x3! Weighted Average Shares Outstanding Below is the summary of Afika ordinary share activities : Dates Share Changes Share Outstanding January 1 Beginning Blance 30,000 February 29 Issued 20,000 shares 20,000 May 1 Purchased 5,000 treasury shares (5,000) July 31 Issued 10,000 shares 10,000 October 1 2-for-1 share split 55,000 December 31 Ending Balance 110,000 Compute the weighted average shares outstanding! Earnings Per Share Using the weighted average shares outstanding above, compute the basic and diluted EPS using following information 1. 6% Convertible bond at par, with face value of Rp 10,000,000. The fair value of liability component at year end is Rp 9,600,000. The convertible bond can be converted to 10,000 Shares in total. Market rate of equivalent non-convertible bond is 10% 2. 8%, Rp 5,000,000 preference shares convertible to 2,000 shares 3. 30,000 warrants are outstanding. 2 of warrants could be excercised to purchase one ordinary share for Rp 1,500. 4. Afika’s net income is Rp 15,000,000. Market price at year end is Rp 2,100 and tax rate 25%.