Charborough Co – Question 3-a(ii) – Forecast EPS

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December 12, 2023 at 7:44 am #696624
harry1094
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Dear Tutor,

In the suggested answer of this question of forecasting EPS after the sale of coffee shop, I do not understand why they did not take into account the profit from disposal of coffee shops and the correspondence tax impact when forecasting Adjusted profit.

Please help clarify this point for me.

Thanks alot
December 12, 2023 at 9:38 am #696635
John Moffat
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Please tell me the date of the examination that this question is from. (I have all past exam questions and answers but I cannot remember the name of every individual question 🙂 )
December 12, 2023 at 9:42 am #696636
harry1094
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Sorry I missed that key info 🙂
This has been examinsed in Mar June 20222.
Pls help me
December 12, 2023 at 5:05 pm #696660
John Moffat
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It is because the profit on the sale of the coffee shops is a ‘one-off’ immediate profit (and as such has been added to the retained earnings on the SOFP). However as far as the forecast future profits are concerned, they will not be affected by the profit on sale.
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