Question 2 (a) City Limited has an issued ordinary share capital of $1 million, divided into ordinary shares of 25 cents each, and 500,000 $1 preference shares carrying a dividend of 7% p.a. The following information is provided in respect of Year 1 and Year 0. Statement of profit or loss and other comprehensive income (extracts) Year 1 $ Year 0 $ Profit before taxation Less: Taxation Profit after taxation 900,000 700,000 (200,000) (165,000) Dividends: Ordinary shares 700,000 (150,000) (100,000) 535,000 Preference shares (35,000) (35,000) Net profits 515,000 400,000 Required: Calculate the basic earnings per share for the year ended 31 December Year 1 and Year 0. Question 2 (a) Adjust preference dividends to net profits: Year 1 Year 0 $000 $000 Profits after tax 700 535 Less: Preference dividends (35) (35) 665 500 Basic EPS: Net Profits Weighted average number of shares EPS (b) Year 1 Year 0 665 500 4,000 4,000 16.6 cents 12.5 cents

Question 2 (a) City Limited has an issued ordinary share capital of $1 million, divided into ordinary shares of 25 cents each, and 500,000 $1 preference shares carrying a dividend of 7% p.a. The following information is provided in respect of Year 1 and Year 0. Statement of profit or loss and other comprehensive income (extracts) Year 1 $ Year 0 $ Profit before taxation Less: Taxation Profit after taxation 900,000 700,000 (200,000) (165,000) Dividends: Ordinary shares 700,000 (150,000) (100,000) 535,000 Preference shares (35,000) (35,000) Net profits 515,000 400,000 Required: Calculate the basic earnings per share for the year ended 31 December Year 1 and Year 0. Question 2 (a) Adjust preference dividends to net profits: Year 1 Year 0 $000 $000 Profits after tax 700 535 Less: Preference dividends (35) (35) 665 500 Basic EPS: Net Profits Weighted average number of shares EPS (b) Year 1 Year 0 665 500 4,000 4,000 16.6 cents 12.5 cents

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter3: Review Of A Company's Accounting System

Section: Chapter Questions

Problem 7E: Basic Income Statement The following are selected account balances of Rule Corporation at the end of...

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a company has the following items: share capital-ordinaty: $920,000 treasury shares : $85,000 deferred taxes $100,000 retained earning : $ 363,000 which ammount should be report as total equity ? A- 1098000 B- 1198000 C- 1298000 D- 1398000
Item 13 refers to the following account. Appropriation Account $ $ Taxation reserve 10,000.00 By balance 894.50 Preliminary 250.00 Net profit 26,106.50 Transfer to general reserve 4,000.00 Preference share dividend 1,200.00 Ordinary share dividend 6,000.00 13. What conclusion could be drawn from the above appropriation account? i. The company is engaged in a profitable enterprise. ii. The company is not doing too well iii. More dividends can be given to the ordinary shareholders. a. I only c. II only b. I and III only d. II and III only