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Earnings per share

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Earnings per share

  • This topic has 1 reply, 2 voices, and was last updated 2 weeks ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • April 29, 2025 at 8:13 am #717047
    zumrudaliyeva
    Participant
    • Topics: 22
    • Replies: 6
    • ☆

    Dear Sir, in the below-mentioned question I calculated weighted average of shares by calculating both the year fraction and bonus fraction which gives me 1150000/8666667= 13.3. But in the answer, I see that they just divided the profit after tax, 1150000 by the total number of shares in the amount of 8m. So, they got different answer from mine. 13.3 vs 14.4

    The question:
    Dorabella had the following capital and reserves on 1 April 20X1:
    $000
    Share capital ($1 ordinary shares) 7,000
    Share premium 900
    Revaluation surplus 500
    Retained earnings 9,000
    ––––––
    Shareholders’ funds 17,400
    ––––––
    Dorabella makes a bonus issue of one share for every seven held, on
    31 August 20X2.

    Dorabella’s results are as follows: 20X3 20X2
    $000 $000
    Profit after tax 1,150 750

    Calculate EPS for the year ending 31 March 20X3, together with
    the comparative EPS for 20X2 that would be presented in the 20X3
    accounts.

    May 4, 2025 at 11:16 am #717138
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7149
    • ☆☆☆☆☆

    Hi,

    Yes, with the bonus issue you do not need to do any weighting calculation. There is no impact on cash (as none was received in a bonus issue) and so no impact on profits, so we do not need to weight the share issue.

    Thanks

  • Author
    Posts
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