Example: Bonus issues On 1 January 20X1, ABC Ltd has 100,000 ordinary shares in issue and 50,000 10% preference shares. On 1 October 20X1, ABC declared 1 bonus share for every 2 existing shares held. Profit after tax for 20X0 and 20X1 were $45,000 and $55,000 respectively. Determine basic EPS for 20X0 and 20X1. 20X1 20X0 Profits attributable to ordinary shareholders 500,000 400,000 No. of ordinary shares at year end Basic EPS (original calculated) 2,000,000 1,000,000 $0.25 $0.4 EPS for 20X0=40,000 100,000 = $0.4 EPS for 20X1 = 50,000 / 150,000 = $0.33 EPS for 20X0 (restated) = $0.4 ÷ BAF 3/2 = $0.27 Bonus adjustment factor (BAF) = 1 + bonus issue ratio = 1 + 1 = 3/2

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

how does it calculate the 500000 in 20x1 and 400000 in 20x0 in profit attribitable to ordinary sahreholders column?

Example: Bonus issues
On 1 January 20X1, ABC Ltd has 100,000 ordinary shares in issue and 50,000 10% preference shares. On 1
October 20X1, ABC declared 1 bonus share for every 2 existing shares held. Profit after tax for 20X0 and 20X1
were $45,000 and $55,000 respectively.
Determine basic EPS for 20X0 and 20X1.
20X1
20X0
Profits attributable to ordinary shareholders
500,000
400,000
No. of ordinary shares at year end
Basic EPS (original calculated)
2,000,000
1,000,000
$0.25
$0.4
EPS for 20X0=40,000 100,000 = $0.4
EPS for 20X1 = 50,000 / 150,000 = $0.33
EPS for 20X0 (restated) = $0.4 ÷ BAF 3/2 = $0.27
Bonus adjustment factor
(BAF)
= 1 + bonus issue ratio
= 1 + 1 = 3/2
Transcribed Image Text:Example: Bonus issues On 1 January 20X1, ABC Ltd has 100,000 ordinary shares in issue and 50,000 10% preference shares. On 1 October 20X1, ABC declared 1 bonus share for every 2 existing shares held. Profit after tax for 20X0 and 20X1 were $45,000 and $55,000 respectively. Determine basic EPS for 20X0 and 20X1. 20X1 20X0 Profits attributable to ordinary shareholders 500,000 400,000 No. of ordinary shares at year end Basic EPS (original calculated) 2,000,000 1,000,000 $0.25 $0.4 EPS for 20X0=40,000 100,000 = $0.4 EPS for 20X1 = 50,000 / 150,000 = $0.33 EPS for 20X0 (restated) = $0.4 ÷ BAF 3/2 = $0.27 Bonus adjustment factor (BAF) = 1 + bonus issue ratio = 1 + 1 = 3/2
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
steps

Unlock instant AI solutions

Tap the button
to generate a solution

Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education