2. Wookie plc has a year end of 31 December. The company had 10 million 25 p ordinary shares in issue throughout the year ending 31 December 2021. On 1 August 2022, the company made a 1 for 5 rights issue to existing shareholders at a price of 80 pence per share. The share price immediately before the rights issue was £1.10.< Profit for the year ending 31 December 2021 was £3.75 million and profit for the year ending 31 December 2022 was £4.25 million. Requirements: (a) Explain why the earnings per share figure is important to investors of listed companies.< (b) Explain the treatment of rights issues and bonus issues when calculating the earnings per share figure for a company in accordance with IAS 33 Earnings Per Share.< (c) Calculate Wookie plc's earnings per share figure for the year ending 31 December 2022 and the original and restated earnings per share for the year ending 31 December 2021.<
2. Wookie plc has a year end of 31 December. The company had 10 million 25 p ordinary shares in issue throughout the year ending 31 December 2021. On 1 August 2022, the company made a 1 for 5 rights issue to existing shareholders at a price of 80 pence per share. The share price immediately before the rights issue was £1.10.< Profit for the year ending 31 December 2021 was £3.75 million and profit for the year ending 31 December 2022 was £4.25 million. Requirements: (a) Explain why the earnings per share figure is important to investors of listed companies.< (b) Explain the treatment of rights issues and bonus issues when calculating the earnings per share figure for a company in accordance with IAS 33 Earnings Per Share.< (c) Calculate Wookie plc's earnings per share figure for the year ending 31 December 2022 and the original and restated earnings per share for the year ending 31 December 2021.<
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
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 24E
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