Ace Bhd’s capital structure consists of 200,000,000 ordinary shares in issue throughout the 2021 financial year. Their profit after tax and non-controlling interest for the year ended 31 December 21 was RM50,000,000. The corporate tax is 30%. On 1 April 2021, Ace Bhd issued RM20,000,000 of convertible unsecured loan stock (CULS) at par. The CULS carries an effective interest rate of 8% per annum and each RM1,000 of CULS is convertible into 500 ordinary shares on or before 31 December 2022. Even though the offer looks attractive, none of the CULS has been converted until 31 December 2021. Required: Compute the basic EPS and the diluted EPS for Ace Bhd for the year ended 31 December 2021. Briefly explain the accounting treatment applied in this scenario
Ace Bhd’s capital structure consists of 200,000,000 ordinary shares in issue throughout the 2021 financial year. Their profit after tax and non-controlling interest for the year ended 31 December 21 was RM50,000,000. The corporate tax is 30%. On 1 April 2021, Ace Bhd issued RM20,000,000 of convertible unsecured loan stock (CULS) at par. The CULS carries an effective interest rate of 8% per annum and each RM1,000 of CULS is convertible into 500 ordinary shares on or before 31 December 2022. Even though the offer looks attractive, none of the CULS has been converted until 31 December 2021.
Required: Compute the basic EPS and the diluted EPS for Ace Bhd for the year ended 31 December 2021. Briefly explain the accounting treatment applied in this scenario.
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