An entity had 1 million shares in issue on 1 January 20X1. They issued 200,000 shares at market value on 1 April, followed by a 1 for 5 bonus issue on 1 August, with a further 300,000 issued at market value on 1 October.
Required
If profit for the year ending 31 December 20X1 is $230,000, what is the basic earnings per share?
I do not understand why you calculate 2 lines:
1 January 1,000,000*6/5*3/12=300,000
1 April 1,200,000*6/5*4/12=480,000
6/5, please explain?
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