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EPS kit

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

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by MikeLittle.
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  • Author
    Posts
  • November 21, 2017 at 2:28 pm #417158
    iyamu
    Participant
    • Topics: 286
    • Replies: 171
    • ☆☆☆

    Dorabella has the following capital and reserves on the 1 April 2001
    $000
    Share capital $1 O.share 7,000
    Share premium 900
    Rev. Reserves 500
    R. E. 9,000
    Total shareholder’s funds= 17,400

    Dorabella makes a bonus issue, of one share for every seven held , on 31 August 2002.
    Dorabella Plc results are as follows :
    Profit after tax 2003 : $1,150,000 and 2002 $ 750,000

    Calculate EPS for the year ending 31 March 2003 , together with the comparative EPS for 2002 that would be presented in the 2003 accounts .

    Answer : EPS for 2012 is 750,000/8,000,000= $ 0.094
    EPS for 2003 is 1,150,000/8,000,000 = $0.144
    Again my question is how do they arrive at the number of shares used in EPS calculation for both years 7,000,000 + 1,000,000

    November 21, 2017 at 3:01 pm #417171
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23332
    • ☆☆☆☆☆

    The bottom half of page 117 in the course notes deals with this issue of bonus shares together with the example Larissa on page 118

    Both of your problems about 7 million and 1 million shares should be clearer when you have re-worked the Larissa example

    OK?

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    Posts
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