Question

For several years Orbon Inc. has followed a policy of paying a cash dividend of $0.68 per share and having a 4% stock dividend. In the 2020 annual report, Orbon reported restated earnings per share for 2018 of $1.01. Required: Calculate the originally reported earnings per share for 2018. Calculate the restated cash dividend per share for 2018 reported in the 2020 annual report for comparative purposes.

a.	Earnings per share
b.	Dividend per share

Answer 1

Originally reported earnings per share for 2018:
Particulars	Computation	Amount
Reported in 2020		$ 1.01
Reported in 2019	($ 1.01 * 1.04)	$ 1.050
Reported in 2018	($ 1.050 * 1.04)	$ 1.092
(We have to do backward calculation in order to find out originally reported earnings per share)

Calculate the restated cash dividend per share for 2018 reported in the 2020 annual report for comparative purposes
Particulars	Computation	Amount
Reported in 2018		$ 0.68
Reported in 2019	($ 0.68 / 1.04)	$ 0.654
Reported in 2020	($ 0.654 /1.04)	$ 0.629
(We have to do Forward calculation in order to find out restated cash dividend per share)

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