ECONOMICS

Detailed explanation-1: -Basic earnings per share should be calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

Detailed explanation-2: -Earnings per share is the portion of a company’s income available to shareholders and allocated to each outstanding share of common stock. EPS equals the difference between net income and preferred dividends, divided by the average number of outstanding common shares.

Detailed explanation-3: -Solution: As per AS 20, when bonus shares are issued during the year, it should be calculated in the weighted average from the beginning of reporting period irrespective of issue date. Therefore, the bonus issue is treated as if it had occurred prior to the beginning of the year 2010, the earliest period reported.

Detailed explanation-4: -Earnings per share ratio (EPS) is a financial ratio calculated by dividing net income by the total number of issued common shares. Investors use EPS to assess a company’s performance and profitability before investing.