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EPS

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

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by P2-D2.
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  • December 2, 2021 at 12:28 pm #642308
    Varun.J.Thakkar
    Participant
    • Topics: 47
    • Replies: 50
    • ☆☆

    Plumstead Co had 4 million equity shares in issue throughout the year ended 31 March 20X7.
    On 30 September 20X7 it made a 1 for 4 bonus issue. Profit for the year ended 31 March 20X8
    was $3.6 million, out of which an equity dividend of 20c per share was paid. The financial
    statements for the year ended 31 March 20X7 showed earnings per share (EPS) of $0.70.

    What is the EPS for 2OX8
    Dear sir,
    The equity dividend of 20c per share paid is not deducted from profit of 3.6m in EPS calculation…why?
    Is it because dividends are paid out of retained earnings?
    Pls help ..Thanks

    December 11, 2021 at 11:22 am #643882
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6473
    • ☆☆☆☆☆

    Hi,

    Yes. The earnings figure is the profit for the year and any dividends are deducted from the retained earning figure in the SOCIE, so no adjustment is made to the profit for the year figure on the SPL.

    Thanks

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