8. An entity, Dominic Limited has profit after tax of $15 million for the year ended December 31, 2020. The following appropriations of profit have not been included in this amount: 1. Arrears of cumulative preference dividend for 2 years ended December 31, 2020 - $4M 2. Ordinary dividends - $5M 3. Preference share premium payable on redemption-appropriation of profit - $1M 4. Exceptional profit (net of tax) - $4M These share transactions occurred during the year ended December 31, 2020. The entity had 3 million ordinary shares of $1 outstanding at January 1, 2020: Date Ordinary shares issued/purchased |Issued at $5 per share-$1 paid to date: Jan. 1 250,000 entitled to participate in dividends to the extent paid up. | Apr. 1 Full market price $3 per share issue. 600,000 Purchase of own shares at $3.50 per Jul. 1 (400,000) share. Required: Calculate basic earnings per share.
8. An entity, Dominic Limited has profit after tax of $15 million for the year ended December 31, 2020. The following appropriations of profit have not been included in this amount: 1. Arrears of cumulative preference dividend for 2 years ended December 31, 2020 - $4M 2. Ordinary dividends - $5M 3. Preference share premium payable on redemption-appropriation of profit - $1M 4. Exceptional profit (net of tax) - $4M These share transactions occurred during the year ended December 31, 2020. The entity had 3 million ordinary shares of $1 outstanding at January 1, 2020: Date Ordinary shares issued/purchased |Issued at $5 per share-$1 paid to date: Jan. 1 250,000 entitled to participate in dividends to the extent paid up. | Apr. 1 Full market price $3 per share issue. 600,000 Purchase of own shares at $3.50 per Jul. 1 (400,000) share. Required: Calculate basic earnings per share.
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 48P
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Transcribed Image Text:8. An entity, Dominic Limited has profit after tax of $15 million for the year
ended December 31, 2020. The following appropriations of profit have
not been included in this amount:
1. Arrears of cumulative preference dividend for 2 years ended
December 31, 2020 - $4M
2. Ordinary dividends - $5M
3. Preference share premium payable on redemption-appropriation
of profit - $1M
4. Exceptional profit (net of tax) - $4M
These share transactions occurred during the year ended December 31, 2020.
The entity had 3 million ordinary shares of $1 outstanding at January 1, 2020:
Date
Ordinary shares
issued/purchased
Issued at $5 per share-$1 paid to date:
entitled to participate in dividends to the
Jan. 1
250,000
extent paid up.
Apr. 1
600,000
Full market price S3 per share issue.
Purchase of own shares at $3.50 per
Jul. 1
(400,000)
share.
Required:
Calculate basic earnings per share.
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