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Basic EPS

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Basic EPS

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by P2-D2.
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  • May 20, 2024 at 2:36 pm #705729
    sarbrina
    Participant
    • Topics: 57
    • Replies: 78
    • ☆☆

    Hi… please explain why the number of shares for 1 April is 3,600,000 and not 1,200,000.
    Thank you so much.

    The Garfish Company had profits after tax of £3.0 million in the year ended 31 December
    20X7. On 1 January 20X7, Garfish had 2.4 million ordinary shares in issue. On 1 April 20X7
    Garfish made a one for two rights issue at a price of £1.40 when the market price of Garfish’s
    shares was £2.00.
    Required:
    What is Garfish’s basic earnings per share figure for the year ended 31 December 20X7,
    according to IAS 33 Earnings per Share?

    May 25, 2024 at 7:59 am #705973
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7171
    • ☆☆☆☆☆

    Hi,

    We will have issued 1,200,000 shares at 1 April and so there will now be a total of 3,600,000 in issue as there were already 2,400,000 in issue prior to the rights issue of shares.

    Thanks

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