Problem: An entity had 100,000 P50 par value ordinary shares outstanding on January 1, 2023. In addition, on January 1, 2023, the entity had issued 10,000 convertible cumulative 5% preference shares with P100 par. These preference shares were converted on September 1, 2023. Each preference share was converted into 6 ordinary shares. The preference dividends for the entire year were paid in full before the conversion. The entity had no other potentially dilutive securities. Net income for the current year was P2,000,000.
1. What amount should be reported as basic earnings per share? a. 16.25 b. 16.67 C. 20.00 d. 19.50
2. What amount should be reported as diluted earnings per share? a. 12.50 b. 12.19 C. 16.25 d. 15.00