QUESTIONS 1. The following information is provided for Slow-Ways Bhd a. The profits and dividends declared for the year ended 31 December x4 areas shown below: RM'000 RM'000 Profit after taxation from continuing 73,000 operations: Loss after tax from discontinued (10,000) ‘operation Profit ater tax 3,000 Dividends declared for the year: Ordinary shares 30,000 Preference shares thalf year) 5,250 Ordinary share capital 300 milion shares 7% cumulative preference share capital 150 milion shares b. On June x5, the company made a bonus issue of one ordinary share for every two shares presently held. €. On 1 October x5, the company issued 50 million ordinary shares to acquire a business, Profits after tax for year x5 amounted to RM75 nillion. 4d. A rrights issue of one ordinary share for every five held was made on 31 August x6 at RM2 each, The market price of each ordinary share ‘immediately before the issue was RM3. The profit after tax for year x6 ‘was RM100 million. Required: Calculate EPS for the years x4, x5 and x6694 MFRS 193 CHAPTER 35 2. Given below isan extract of statement of profit or loss of Ayer Bhd a listed company Profit fr the year ended 30 June x5 RM Profit before taxation 700,000 Taxation 30% 200,000 500,000 Dividends paid — ordinary shares 100,000 ~ preference shares 35,000 The following infofmation is also provided: 4 Issued share capital on 1 July x4 comprises 2 million ordinary shares and RM500,000 7% preference shares. b. On 1 July x4, RM500,000 10% convertible debentures (convertible into 200 ordinary shares per RM100 debenture) were outstanding, ce. Changes in capital structure during the year ended 30 june x5 are as follows i. On 1 October x4, # rights issue of ordinary shares on a one-for- four basis at 80 sen (market price before the issue was RMI) was made. ii, The basic EPS for the year ended 30 June x4 was 18 sen. a. Tax rate is 30%, Required: a. Compute the company’s basic FPS for the current yearand comparative figure for the previous year. b. Compute the diluted EPS for the current year. 3. Given below is the income summary for Travel Bhd for the years ended 31 December x6 and x5: x6 xs RM'000 -RM'000 Profit before taxation 500 450 Taxation 150) 140 Ordinary dividends 6o 50) The following information is retevant: a. On 1 January x5, the issued share capital consisted of 2 milion ordinary shares b. On 1 July x5, 1 million ordinary shares were issued for a fair consideration of RML.5 million On 1 January x5, options were granted to employees to subscribe for 500,000 ordinary shares in Travel Bhd for RM400,000.Eamings Per Share 4d. The average market price of one ordinary share of Travel Bhd for the year ended 31 December x5 and x6 was RMI and RM1.20 each, respectively On 1 April x6, the company bought back 500,000 ordinary shares. f. The net loss from discontinued operations for year x6 was RM100,000. From the information given, you are required to calculate the basic EPS and difuted EPS for years x5 and x6. ‘The share capital of Rainbow Bhd as at 30 September x5 consisted of 8 nlllion ordinary shares amounted to RM$ million, (On | December x5, Rainbow Bhd consolidated two existing shares into fone share, (On 31 December x6, the company issued 2 million ordinary shares at {air price for cash. The subscribers paid 50% of the capital. The company pays dividends on paid-up capital. The balance of capital was paid on 1 October x7 On 1 January x7, Rainbow Bhd issued 10% convertible loan stock of RM2 million, These debentures may be converted into ordinary shares of 100 ordinary shares for every RMI00 debenture. ‘The following information was available: Year ended Profit after tax and interest 30.95 M380,000 30.9.x6 'RM400,000 30.9x7 M440,000 30.98 M490,000 Income tax on company profits is 30%, Required: Calculate the basic and diluted earnings per share for Rainbow Bhd as at 30 September x5, x6, x7 and x8. Stamford Bhd has in issue 10 million fully paid ordinary shares, # milfion ‘ordinary shares which are 50% paid and RMS million fully paid 7.5% convertible cumulative preference shares. Preference sharesare convertible into ordinary shares ata rate of 5:4, meaning five preference shares become four ordinary shares (On 1 January x7, the company issued employee share options of 1 million shares. The exercise price was RM3 per share. On 1 April x8, the unpaid capital on the + million shares was called up and was fully paid On 1 July x8, half of the preference shares were converted into ordinary shares. 695696 MFRS 133° CHAPTER 35 Profit after tax for x7 was RM2 million and for x8 it was RM2.2 million. Average price of one ordinary share was RM3 in x7 and RM7.50 in x8. Tax rate is 25%. Required: Compute the company’s basic and diluted EPS for the years ended 31 December x7 and x8. On 1 January x9, Friends Bhd had in issue 40 million ordinary shares. 1. also had in issue RM6 million 8% convertible debentures The following information for years x9 and x10 is available: a. On 1 July x9, Friends Bhd issued RM1O million 7% convertible cumulative preference shares. b. On I July x10, Friends Bhd issued the ordinary shares of a previously declared one-for-four rights issue at RM2.50 per share. Mid-market price of the ordinary shares on the last date of the quotation cum rights was RM4.20 per share. c. The company issued options to senior executives on 1 January x10. These options are exercisable on or before 30 June x14. The option is to subscribe for 10 million ordinary shares at RM2.50 each. The company’s average price of one ordinary share during year x10 was RM4. 4. The convertible preference shares were issued on 1 July x9. The conversion rate for preference shares was one ordinary share for every two convertible preference shares in issue. ©. The convertible debentures were issued in x7. The conversion rate for convertible debentures was 100 ordinary shares for every RM150 debentures, ‘The following are extracts from the statement of profit or loss for the years ‘ending 31 December x10 and x9 x10 x9 RM'000 RM‘000 Profit before tax 10,000 5,000 Taxation (3,000) «1.5000 (000 3,500 The profit after tax from discontinued operations for x9 was a loss of M500, 000. ‘Tax rate is 30%. Required: Calculate the basic and diluted earnings per share for the year ended 31 December x10 and restate the earnings per share for the year ended 31 December x9.