Discontinued operations

Redundancy costs ..... yes Reorganisation costs ......no\\redundancy is final and clearly associated with the closure / discontinued operation Reorganisation is related to the continuing business and therefore not a part of the discontinuance The rights fraction calculation table is as follows, but you'll probably have to excuse the alignment! Number Value $ 5 4.50 22.50 2 2.75 5.50 7 B 4.00 28.00 ie you now have 7 shares with an aggregate value of $28.00 so theoretical value of each share is $4 and the rights fraction is 4.5 / 4 Can you go on from there?

So would I have as follows: Earnings / old shares x 4.5/4 x 9/12 then add number of shares after which is still 7 million x 3/12 x 7/5?

No! Or maybe, Yes! Are you happy with the rights fraction of 4.5 / 4? Now, the table to calculate the weighted average number of equity shares goes as follows and again you're going to have to excuse the alignment! Date number period fraction Wanes 1. 07.x5 7,000,000 9/12 4.5/4 5,906,250 1. 04.x6 9,800,000 3/12 - 2,450,000 So weighted average number is (5,906,250 + 2,450,000) 8,356,250 and earnings are $2,250,000 so eps is 26.9 cents (check my calcs - I did them without calculator!)

Ok I get the same :) thanks P purchased S on 1/7/05 y/e 31/12/05 they have below: P. S Rev. 3500. 1000 Cos. (2800). (800) GP. 700. 200 In the year P sold goods to S for $2 million which were made evenly throughout the year. 20% of these goods remain in year end inventory - all of which we're sold after 1/7. These goods were all sold at mark up of 25%. How would I work out the figure for the P group consolidated COS fit the year please? I know they have only purchased part way through 6 months? Thanks

Pup in P is 2m x 25/125 x 20% = 80,000 So pup in P retained earnings is (80,000) Group revenue should be decreased by 6/12 x 2m Group cosales should be decreased by 6/12 x 2m Group cosales should be increased by 80,000 Revenue is therefore 3,500 + (1/2*1,000) - 1,000 = 3,000 Cosales is 2,800 + (1/2*800) - 1,000 + .08 = 2,280 GP = 720 OK?

It only gives you a chose of; A. $1680000 B. $1760000 C. $2680000 D. $2760000 ?????

Strange! If S has bought $2m from P during the year, how come the S cost of sales is only $800? Unless there's something you're not telling me, or you've given me a wrong date or amount, I can't see why my answer is incorrect. What is the correct answer per the printed solution?