On 1 June 2016, Agate Bhd has issued a total of 800000 ordinary shares. On 1 April 2018, Agate Bhd issued an additional 600000 shares for cash. All 1400000 shares were outstanding on 31 December 2018. It also issued RM 600000 of 20-year 8% convertible bonds on 1 July 2016. Each RM 100 bond converts to 40 ordinary shares. None of the bonds have been converted to date. The interest expense on the liability component of convertible bonds for 2018 was RM 30000. The profit after tax for the year ended 31 December 2016 is RM 1540000. The tax rate is 40%. Required: a) Compute the number of ordinary shares to be used for calculating for 2016: i. Basic EPS ii. Diluted EPS b) Compute the earnings figures to be used for calculating for 2016: i. Basic EPS ii. Diluted EPS c) Compute basic EPS for 2016. d) Compute diluted EPS for 2016.
On 1 June 2016, Agate Bhd has issued a total of 800000 ordinary shares. On 1 April 2018, Agate Bhd issued an additional 600000 shares for cash. All 1400000 shares were outstanding on 31 December 2018. It also issued RM 600000 of 20-year 8% convertible bonds on 1 July 2016. Each RM 100 bond converts to 40 ordinary shares. None of the bonds have been converted to date. The interest expense on the liability component of convertible bonds for 2018 was RM 30000.
The profit after tax for the year ended 31 December 2016 is RM 1540000. The tax rate is 40%.
Required:
a) Compute the number of ordinary shares to be used for calculating for 2016:
i. Basic EPS
ii. Diluted EPS
b) Compute the earnings figures to be used for calculating for 2016:
i. Basic EPS
ii. Diluted EPS
c) Compute basic EPS for 2016.
d) Compute diluted EPS for 2016.
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