Example: Bonus issues On 1 January 20X1, ABC Ltd has 100,000 ordinary shares in issue and 50,000 10% preference shares. On 1 October 20X1, ABC declared 1 bonus share for every 2 existing shares held. Profit after tax for 20X0 and 20X1 were $45,000 and $55,000 respectively. Determine basic EPS for 20X0 and 20X1. 20X1 20X0 Profits attributable to ordinary shareholders 500,000 400,000 No. of ordinary shares at year end Basic EPS (original calculated) 2,000,000 1,000,000 $0.25 $0.4 EPS for 20X0=40,000 100,000 = $0.4 EPS for 20X1 = 50,000 / 150,000 = $0.33 EPS for 20X0 (restated) = $0.4 ÷ BAF 3/2 = $0.27 Bonus adjustment factor (BAF) = 1 + bonus issue ratio = 1 + 1 = 3/2

Example: Bonus issues On 1 January 20X1, ABC Ltd has 100,000 ordinary shares in issue and 50,000 10% preference shares. On 1 October 20X1, ABC declared 1 bonus share for every 2 existing shares held. Profit after tax for 20X0 and 20X1 were $45,000 and $55,000 respectively. Determine basic EPS for 20X0 and 20X1. 20X1 20X0 Profits attributable to ordinary shareholders 500,000 400,000 No. of ordinary shares at year end Basic EPS (original calculated) 2,000,000 1,000,000 $0.25 $0.4 EPS for 20X0=40,000 100,000 = $0.4 EPS for 20X1 = 50,000 / 150,000 = $0.33 EPS for 20X0 (restated) = $0.4 ÷ BAF 3/2 = $0.27 Bonus adjustment factor (BAF) = 1 + bonus issue ratio = 1 + 1 = 3/2

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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At 1 January 20X9, company X had in issue 10 million ordinary shares. On 30 April 20X9, company Xmade a 2 for 5 rights issue at £1.20 per share. At that date the share price (before the issue wasannounced) was £1.60 per share. The earnings of the company were £3m for 20X9.Calculate the basic EPS for 20X9.
BEPS - rights issue A company has 1,000,000 shares in issue at that start of the year. During the year, a rights issue of one new share for every four shares was made at a price of £5 per share. The pre-issue market price was £6.50 per share. The theoretical ex-rights price (TERP) is: Select one: O a. £5.00 b. £6.20 C. £5.30 O d. £6.00
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O Zero On July 1, 2020, ABC Corporation invested in the stocks of XYZ foreign corporation, by acquiring 10,000 shares at P12/share. On December 20, 2020, XYZ declared a 20% stock dividend payable on January 15, 2021. On January 2, 2021, ABC Corporation sold 10,000 shares for P13/share. Compute the net capital gain to be included in regular income. O30,000 O 15,000 O 10,000 O Zero
Direction: Choose the correct answer.
Answer ASAP please
PROVIDE COMPUTATION
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