On January 1, 2021, the start of the current financial year, Tubble Ltd had in issue 36 million ordinary shares with a par value of $1.60 each. The company also had a retained earnings balance of $121.6 million, a revaluation reserve balance of $5.9 million, and a share premium balance of $16.4 million. On May 1, 2021, the entity made a two for three bonus issue of shares, sparing retained earnings as much as possible. The entity reported profit after tax of $17.5 million for 2020 and $24.1 million for 2021. Required: o Prepare the relevant journal entries to record the bonus issue of shares. o Determine the EPS for 2021.
On January 1, 2021, the start of the current financial year, Tubble Ltd had in issue 36 million ordinary shares with a par value of $1.60 each. The company also had a retained earnings balance of $121.6 million, a revaluation reserve balance of $5.9 million, and a share premium balance of $16.4 million. On May 1, 2021, the entity made a two for three bonus issue of shares, sparing retained earnings as much as possible. The entity reported profit after tax of $17.5 million for 2020 and $24.1 million for 2021. Required: o Prepare the relevant journal entries to record the bonus issue of shares. o Determine the EPS for 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On January 1, 2021, the start of the current financial year, Tubble Ltd had in issue 36 million ordinary
shares with a par value of $1.60 each. The company also had a retained earnings balance of $121.6 million,
a revaluation reserve balance of $5.9 million, and a share premium balance of $16.4 million.
On May 1, 2021, the entity made a two for three bonus issue of shares, sparing retained earnings as much
as possible.
The entity reported profit after tax of $17.5 million for 2020 and $24.1 million for 2021.
Required:
o Prepare the relevant journal entries to record the bonus issue of shares.
o Determine the EPS for 2021.
o Determine the original and restated EPS for 2020.
Recommended time: 25 minutes
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