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

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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