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, thecompany offered a 1:2 rights issue (e.g., one new share for every two shares held) ata price of 100p per share. The post-tax earnings were £3m and £4m for 2019 and2020, respectively.Required:a) Calculate the basic EPS for XYZ plc 31 December 2020, in accordance with bestaccounting practice.b) What is the bonus element for shareholders?

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Answered: XYZ plc had an issued share capital of…

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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14. Laursen plc has announced a 1 for 3 rights issue at a subscription price of £2. The current price of the shares is £3.04. What is the theoretical value of the right per existing share? a. £0.78 b. £0.35 c. £0.26 d. £2.78
Jane Company has granted 200 share appreciation rights to each of its 300 employees on January 1, 2016. The rights are due to vest on December 31, 2017, with payment being made on December 31, 2018. During the year 2016, the company estimated that all options would vest; although only 90% of the options actually vested. Share prices are as follows: January 1, 2016 P20 December 31, 2016 24 December 31, 2017 27 December 31, 2018 301. What liability will be recorded on December 31, 2016 as a result of the share appreciation rights? 2. How much compensation expense should be recorded for the year ended December 31, 2017?
During 2020, Empresas ABC issued 4,000 preferred shares with a par value of $ 10 to $ 11 each. Each preferred share can be exchanged at the option of the holder (investor) for three common shares of ABC with a par value of $ 1. In August 2021, all preferred shares were exchanged. At that time the market value of the common stock was $ 5 per share. What amount must ABC credit to the Capital account contributed in excess of the value for common shares? a. $32,000 b. $48,000 c. 0 d. $44,000
On January 1, 2020, a company issued 10-year, $330,000 face value, 7% bonds, at par. Each $1,000 bond is convertible into 11 shares of common stock. The company’s net income in the year was $460,000, and its tax rate was 24%. The company had 100,000 shares of common stock outstanding throughout 2020. What is the numerator for computing diluted earnings per share for 2020?
Company X has a June 30th year-end. On 1 July 20X5 company X issued £40 million 10%convertible loan stock at par. The terms of conversion (on 1 July 20X9) are that for every £200 ofloan stock, 40 ordinary shares will be issued at the option of loan stockholders. The income tax is25%. Earnings attributable to ordinary shareholders for the year ended 30th June 20X6 were£32.4m and 60 million ordinary shares in issue. You may assume that the convertible loan stock isdilutive.Calculate company X’s diluted EPS for the year ended 30th June 20X6
Company B had net income for the fiscal year ended December 31, 2020 of $5 million. There were 500,000 common shares outstanding throughout 2020. The average market price of the common shares for the entire fiscal year was $50. Company tax rate was 25% for 2020. Company B had the following potential common shares outstanding during 2020: • Options to buy 100,000 common shares at $45 per share. • 100,000 convertible preferred shares entitled to a cumulative dividend of $10 per share. Each preferred share is convertible into 1.5 common shares. • 4% convertible bonds with a principal amount of $30 million, issued at par. Each $1,000 bond is convertible into 25 common shares. For the fiscal year ended December 31, 2020, what is the basic and diluted EPS using IFRS?
The extract balance sheet of a company showed the following: 2020 2021 Debentures 10% Share capital £1 each £400,000 £500,000 £750,000 £1,250,000 During the year to 31 December 2021, £100,000 10% debentures were converted to £100,000 ordinary shares. In addition, the company made a bonus issue of shares of £200,000. Finally, a new issue of 200,000 ordinary shares of £1 each was made at a premium of £0.50 per share. The cash flow from financing activities is: Select one answer: O £200,000 O £500,000 O £400,000 O £300,000
Required: (a)Assuming a rights issue of shares is made, calculate: (i)the theoretical ex-rights price of an ordinary share in Devonian plc (ii)the value of the rights for each original ordinary share. (b)Calculate the price of an ordinary share in Devonian plc in one year’s time assuming: (i)a rights issue is made (ii)a loan issue is made. Comment on your findings.
Q2. On 1 July 2020 Farfalle pc had 5 million £1 ordinary shares in issue. On 1 September2020, Farfelle made a bonus issue of 1 for 2. Its profit after tax for the year ended 30 June 2021 is £3.8m. An ordinary dividend of £1.8m was paid(i) Calculate the earnings for year ended 30 June 2021(ii) Calculate basic EPS for the year ended 30 June 2021 to the nearest pence
"The shareholders equity section of N Company at the end of the 2021 and 2020 are as follows: (2021) 10% Preference share, P100 par P1,500,000; Ordinary share, P20 par P1,000,000; Share premium-preference P210,000; Share premium-ordinary P400,000 (2020) 10% Preference share, P100 par P800,000; Ordinary share, P20 par P600,000; Share premium-ordinary P200,000. What is the average issue price of the preference shares issued in 2021?" P100 per share P130 per share P214 per share P244 per share
At 31 December 2019, B Plc had post-tax profits was $2,500,000 and had an issued share capital of $2,000,000 comprising 2,000,000 ordinary shares of 50p each and 1,000,000 $1 10% preference shares that are classified as equity. Assume that the post-tax profits for 2018 and 2019 were same at $ 2,500,000. The time-weighted number of shares was as follows: No. of Shares Shares (nominal value 50p) in issue at 01 January 2019 2,000,000 Shares issued for cash at market price on 30 September 2019 1,000,000 On 30 September 2019, B plc made a right issue of one share for every two shares (i.e one new share for every two shares held) at $3.25 per share. The following information is also given for B Plc as at 31 December 2019: Share option in existence 1,000,000 shares issuable in 2020 at $3.25 per share. An average market price per share of $4%; 1. Convertible 8% preference shares of $1 each totaling $2,000,000 convertible at one ordinary share for every five convertible preference shares. 2.…
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