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Question 89 Chapter 4 of +2-B – USHA Publication 12 Class

Question 89 Chapter 4 of +2-B
Q-89- CH-4 Book 2 - Usha Pub. +2 Book 2020 - Solution

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Question 89 Chapter 4 of +2-B

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Earning Per Share, Dividend Per Share. Price Earning Ratio 

89. The capital of Everest Co. Ltd. is as follows :

 
9% Preference share of 10 each3,00,000
Equity shares of 10 each8,00,000
 11,00,000

The Accountant has ascertained the following information :

Profit after tax at 65% p.a. 2,70,000
 Equity dividend paid 20% 60,000
Market price per equity share 40

You are required to calculate the following
(i)Earning per share
(ii) Price Earning Ratio

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The solution of Question 89 Chapter 4 of +2-B: – 

Earnings per Share=Net profit after Interest and Tax Preference Dividend
Number of Equity Shares
 = 
 =₹ 2,43,000
 ₹ 80,000
 =₹ 3.0375
Price Earning Ratio=Market price per share
Earning per share
 = 
 =₹ 40
 ₹ 3.0375
 =13.16 times

 

Preference Dividend=9% Preference share  
 =9X₹ 3,00,000
 100
 =₹ 27,000  
Net profit preference Dividend=Profit after tax – Preference Dividend  
 =₹ 2,70,000 – ₹ 27,000  
 =₹ 2,43,000  

 

Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

Question 1 Chapter 1 of +2-B
T.S. Grewal’s Analysis of Financial Statements

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