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LA9 - IAS 33 Comprehensive class example - Question & Template

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15 views

LA9 - IAS 33 Comprehensive class example - Question & Template

Uploaded by

Lungelo Maphumulo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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BAC 200

EPS Comprehensive class example - Question

QUESTION

REQUIRED:

a. Calculate the:
- basic earnings per share,
- diluted earnings per share, and
- dividend per ordinary share
for the year ended 31 December 2023.

NOTE:
Comparative amounts are required.

b. Prepare the extract from the statement of profit or loss and other comprehensive
income and disclose the “Earnings per share” note for the year ended
31 December 2023.

NOTE:
Comparative amounts are required.

INFORMATION:

The following information concerns the issued share capital and earnings of a
company for the year ended 31 December:

2023 2022

Number of ordinary shares in issue at the beginning of ? 1 000


the year.

Number of non-cumulative preference shares in issue at


the beginning of the year (with a fixed annual preference 1 000 1 000
dividend of R0.15 per share).

Dividends declared on non-cumulative preference shares.


No dividend was declared in 2022. R150

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Number of cumulative preference shares in issue at the
beginning of the year (with a fixed annual preference 500 500
dividend of R0.12 per share).

Cumulative preference share dividends declared and


paid. R60 of the cumulative preference dividend declared
and paid in 2022, relates to dividends in arrears from
2021. R60 R120

Number of 20% cumulative convertible preference shares


issued at R4 each on 1 January 2021. These preference
shares are convertible into 2 ordinary shares for every 1
convertible preference share held on 1 October 2023. 500 500

Dividends on cumulative convertible preference shares. ? ?

Number of 12% convertible debentures issued at R2.50


on 1 January 2023. These debentures are convertible
into ordinary shares on 30 June 2025 at R10 each. 2 000

Interest on the convertible debentures. ?

Number of ordinary shares issued on 1 May 2022 for


cash. The cash was receivable on 1 June 2022. 1 200

On 31 August 2022 a capitalisation issue was done on


the basis of 1 ordinary share for every 5 ordinary shares
held. ? ?

Number of ordinary shares issued on 1 September 2023


for cash. The cash was receivable on the same day. 1 800

Extract from the statement of profit or loss and other


comprehensive income for the respective financial years:
Profit before tax R16 150 R15 000
Income tax expense (R4 500) (R4 200)
Profit for the year (after tax) R11 650 R10 800

Ordinary dividends declared on 31 December. R800 R750

Assume the corporate tax rate is 28%.


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TEMPLATE for calculations

Earnings

2023 2022
R R
EX 1 Profit for the year
Minus: Non-cumulative preference dividend
Minus: Cumulative preference dividend
Minus: Cumulative convertible preference dividend
EX 4 Basic earnings
Add: Cumulative convertible preference dividend
Add: Interest (after-tax) on convertible debenture
Diluted earnings

Weighted average number of ordinary shares (WANOS)

2023 2023 2022


Actual Weighted Restated
2022
EX 6 1 Jan 2022 – Opening balance

1 June 2022: Share issue

EX 3
31 Aug 2022: Capitalisation issue

EX 2
2023
1 Sept 2023: Share issue

EX 5
1 Oct 2023: Conversion of preference shares

WANOS for basic earnings

Potential ordinary shares


(preference shares before conversion)

EX 5 Potential ordinary shares


(debentures convertible on 30 June 2025)

WANOS for diluted earnings

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