Gemilang Bhd has share capital of RM1 million in shares of 25 sen each. At 31 May 2022 shares had a market value of RM1.10 each. On 1 June 2022, the company makes a right issue of 1 shares for every 4 held at RM0.60 per share. Its profit were RM500,000 in 2022 and RM440,000 in 2021. The year-end is 30 November. Calculate (a) the theoretical ex-rights price; (b) the bonus issue element; (c) the basic earnings per share for 2021; and (d) the basic earnings per share for 2022.

Gemilang Bhd has share capital of RM1 million in shares of 25 sen each. At 31 May 2022 shares had a market value of RM1.10 each. On 1 June 2022, the company makes a right issue of 1 shares for every 4 held at RM0.60 per share. Its profit were RM500,000 in 2022 and RM440,000 in 2021. The year-end is 30 November. Calculate (a) the theoretical ex-rights price; (b) the bonus issue element; (c) the basic earnings per share for 2021; and (d) the basic earnings per share for 2022.

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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Question

Gemilang Bhd has share capital of RM1 million in shares of 25 sen each. At 31
May 2022 shares had a market value of RM1.10 each. On 1 June 2022, the
company makes a right issue of 1 shares for every 4 held at RM0.60 per share.
Its profit were RM500,000 in 2022 and RM440,000 in 2021. The year-end is 30
November.
Calculate (a) the theoretical ex-rights price; (b) the bonus issue element; (c) the
basic earnings per share for 2021; and (d) the basic earnings per share for 2022.

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