2. Wookie plc has a year end of 31 December. The company had 10 million 25 p ordinary shares inissue throughout the year ending 31 December 2021. On 1 August 2022, the company made a 1 for 5rights issue to existing shareholders at a price of 80 pence per share. The share price immediatelybefore the rights issue was £1.10. <Profit for the year ending 31 December 2021 was £3.75 million and profit for the year ending 31December 2022 was £4.25 million.Requirements:<(a) Explain why the earnings per share figure is important to investors of listed companies.<(b) Explain the treatment of rights issues and bonus issues when calculating the earnings per sharefigure for a company in accordance with IAS 33 Earnings Per Share.<(c) Calculate Wookie plc's earnings per share figure for the year ending 31 December 2022 and theoriginal and restated earnings per share for the year ending 31 December 2021.<

(a) The earnings per share (EPS) figure is important to investors of listed companies because it…

Answered: 2. Wookie plc has a year end of 31…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Alps Ltd has a net income after tax of $1 500 000 for the year ended 30 June 2019. At the beginningof the period Alps Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 December 2018 AlpsLtd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March2019 Alps Ltd made a one-for-six bonus issue of ordinary shares out of retained earnings. The last saleprice of an ordinary share before the bonus issue was $2.50. At the beginning of the current periodAlps Ltd also had 500 000, $1.00, 8% cumulative preference shares on issue. The dividends on thepreference shares are not treated as expenses in the statement of comprehensive income. The basicearnings per share for the period ended 30 June 2018 was $1.50 per share.Required:a) Calculate the basic EPS amount for 2019 and provide the adjusted comparative EPS for 2018. b) Explain what is diluted EPS. Give one example of a security that can dilute the basic EPS. maximum 300 words
On 1st January 2019, Brown Plc., had in issue, 800,000 ordinary shares with a par value of sh. 10 each. On 31st October 2019 the company issued 100,000 ordinary shares at full market price at sh 20 each. On 31st December 2020, the directors decided to declare a bonus issue of 1 for 4. On 31st December 2021, the directors declared a rights issue of 1 for 5 at a price of sh. 20. On the day immediately before the rights issue took effect, the shares of this company were trading at sh. 25 each. Brown Plc. does not have any preference shares in issue.The post-tax earnings for the years 2019, 2020 and 2021 were £350,000 and £520,000 and £ 430,000 respectively. Required a. Compute the basic earnings per share for the years 2019, 2020 and 2021 b. From 'a' above, comment on the financial performance of this company, in each year.
XYZ plc had an issued share capital of 1 million ordinary shares at 1 January 2020. The nominal value was 50p and the market value £2 per share. On 30 June 2020, the company offered a 1:2 rights issue (e.g., one new share for every two shares held) at a price of 100p per share. The post-tax earnings were £3m and £4m for 2019 and 2020, respectively. Required: a) Calculate the basic EPS for XYZ plc 31 December 2020, in accordance with best accounting practice. b) What is the bonus element for shareholders?
Alps Ltd has a net income after tax of $1 500 000 for the year ended 30 June 2019. At the beginningof the period, Alps Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 December 2018 AlpsLtd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March2019 Alps Ltd made a one-for-six bonus issue of ordinary shares out of retained earnings. The last saleprice of an ordinary share before the bonus issue was $2.50. At the beginning of the current periodAlps Ltd also had 500 000, $1.00, 8% cumulative preference shares on issue. The dividends on thepreference shares are not treated as expenses in the statement of comprehensive income. The basicearnings per share for the period ended 30 June 2018 was $1.50 per share.Required:a) Calculate the basic EPS amount for 2019 and provide the adjusted comparative EPS for 2018. use different method to solve this thanks
Alps Ltd has a net income after tax of $1 500 000 for the year ended 30 June 2019. At the beginning of the period Alps Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 December 2018 Alps Ltd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March 2019 Alps Ltd made a one-for-six bonus issue of ordinary shares out of retained earnings. The last sale price of an ordinary share before the bonus issue was $2.50. At the beginning of the current period Alps Ltd also had 500 000, $1.00, 8% cumulative preference shares on issue. The dividends on the preference shares are not treated as expenses in the statement of comprehensive income. The basic earnings per share for the period ended 30 June 2018 was $1.50 per share. Required: a) Calculate the basic EPS amount for 2019 and provide the adjusted comparative EPS for 2018.
Alps Ltd has a net income after tax of $1 500 000 for the year ended 30 June 2019. At the beginning of the period Alps Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 December 2018 Alps Ltd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March 2019 Alps Ltd made a one-for-six bonus issue of ordinary shares out of retained earnings. The last sale price of an ordinary share before the bonus issue was $2.50. At the beginning of the current period Alps Ltd also had 500 000, $1.00, 8% cumulative preference shares on issue. The dividends on the preference shares are not treated as expenses in the statement of comprehensive income. The basic earnings per share for the period ended 30 June 2018 was $1.50 per share. Calculation of the basic EPS amount for 2019 and provide the adjusted comparative EPS for 2018. Explain what is diluted EPS. Give one example of a security that can dilute the basic EPS.
lps Ltd has a net income after tax of $1 500 000 for the year ended 30 June 2019. At the beginningof the period Alps Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 December 2018 AlpsLtd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March2019 Alps Ltd made a one-for-six bonus issue of ordinary shares out of retained earnings. The last saleprice of an ordinary share before the bonus issue was $2.50. At the beginning of the current periodAlps Ltd also had 500 000, $1.00, 8% cumulative preference shares on issue. The dividends on thepreference shares are not treated as expenses in the statement of comprehensive income. The basicearnings per share for the period ended 30 June 2018 was $1.50 per share.Required:a) Calculate the basic EPS amount for 2019 and provide the adjusted comparative EPS for 2018. b) Explain what is diluted EPS. Give one example of a security that can dilute the basic EPS.
- Alps Ltd has a net income after tax of $1 500 000 for the year ended 30 June 2019. At the beginning of the period Alps Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 December 2018 Alps Ltd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March 2019 Alps Ltd made a one-for-six bonus issue of ordinary shares out of retained earnings. The last sale price of an ordinary share before the bonus issue was $2.50. At the beginning of the current period Alps Ltd also had 500 000, $1.00, 8% cumulative preference shares on issue. The dividends on the preference shares are not treated as expenses in the statement of comprehensive income. The basic earnings per share for the period ended 30 June 2018 was $1.50 per share. Required: a) Calculate the basic EPS amount for 2019 and provide the adjusted comparative EPS for 2018. EARLIER ANSWER IS NOT SATISFYING PLEASE USE Theoretical ex bonus price
The following information relates to Rose plc for the year ended 31 December 2019: £,000 Turnover Operating costs Trading profit Net interest payable Exceptional charges Tax expenses Profit after tax 700 476 224 2 222 77 145 66 79 Rose plc had 100,000 ordinary shares of £1 each in issue throughout the year. Rose plc has in issue warrants entitling the holders to subscribe for a total of 50,000 shares in the company. The warrants may be exercised after 31 December 2025 at a price of £1.10 per share. The average fair value of shares was £1.28. The company had paid an ordinary dividend of £15,000 and a preference dividend of £9,000 on preference shares classified as equity. Required: Calculate the basic EPS for Rose plc for the year ended 31 December 2019, in accordance with best accounting practice. Calculate the diluted EPS figure, to be disclosed in the statutory accounts of Rose plc in respect of the year ended 31 December 2019. Briefly…

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS