0
CHAPTER 4
EARNINGS PER SHARE
IAS 33
Page
4.1
The outcomes for the chapter
2
4.2
Introduction
2
4.3
Basic earnings per share
3
4.4
Diluted earnings per share
9
4.5
Headline earnings per share
10
4.6
Dividend per share
10
4.7
Presentation and disclosure
10
4.8
Summary: Schematic representation
11
Questions
12
4-1
CHAPTER 4
EARNINGS PER SHARE
IAS 33
4.1
THE OUTCOMES FOR THE CHAPTER ARE TO:
4.1.1
illustrate the calculation and disclosure of the basic earnings per share in
terms of IAS33;
briefly discuss the differences between the basic earnings per share, diluted
earnings per share and headline earnings per share;
illustrate the calculation and disclosure of the ordinary dividend per share in
terms of IAS1; and
explain the value of earnings and ordinary dividend per share to the users of
financial statements.
4.1.2
4.1.3
4.1.4
4.2
INTRODUCTION
According to the Conceptual Framework the objective of financial statements
is to provide the users of financial statements with useful information relating
to the financial position, performance and changes in the financial position of
an enterprise, in order to make economic decisions.
The disclosure of earnings and ordinary dividend per share provides a
benchmark according to which the performance of a company can be
measured. Profit and the total dividends paid and or declared without referring
to the number of shares are insufficient.
The users of financial statements use earnings and ordinary dividend per share
to:
•
•
evaluate the financial performance of a company by comparing it with
similar enterprises and by analysing the historic record of the
earnings and ordinary dividend per share of an enterprise.
perform ratio analysis such as the price-earnings ratio and dividend
cover calculations.
Without the appropriated guidelines for the calculation and disclosure of
earnings and ordinary dividend per share, it would be impossible to base
meaningful decisions thereon. Every enterprise would use different guidelines
and benchmarks in order to optimise or benefit its own position. IAS33 provides
specific guidelines and benchmarks to ensure that earnings per share are
calculated and disclosed consistently.
4-2
4.3
BASIC EARNINGS PER SHARE
According to IAS33, the basic earnings per share are calculated by dividing
the profit or loss for the period attributed to ordinary shareholders (earnings)
by the weighted average number of ordinary shares outstanding during the
period (WANOS).
Basic earnings per share =
4.3.1
Earnings
WANOS
Earnings
Earnings is the profit or loss for the period from continuing operations after
deducting all preference dividends.
Profit or loss for the period is after all income and expense items, including
taxation have been taken into account, but before any dividends and or any
transfers to or from any distributable or non-distributable reserves. It is thus
the profit after tax that is transferred from the SCI to the SCE.
According to IAS33, the following preference dividends must be deducted from
profit or loss to calculate earnings:
•
•
4.3.2
For non-cumulative preference shares: the after-tax amount of any
preference dividends that were declared during the period.
For cumulative preference shares: the after-tax amount of preference
dividends that accrued for the period; irrespective of whether or not the
dividends have been declared.
Weighted average number of ordinary shares (WANOS)
The WANOS is the number of ordinary shares issued at the beginning of the
period plus the number of ordinary shares that were issued during the period
multiplied by a time weighted factor.
Example 1
On 1 January 2012, the capital structure of A Ltd. consisted of 50 000 ordinary
shares.
The financial year of A Ltd. is from 1 January to
31 December.
Shares were issued as follows:
10 000 Ordinary shares on 30 September 2012
15 000 Ordinary shares on 31 March 2013
2013
Profit for the year
R114 000
Dividends
(declared and paid 31 December)
R30 000
2012
R84 000
R15 000
4-3
Calculation:
Actual
2013
WANOS
2013
1 January 2012
30 September 2012
(10 000 * 3/12)
31 March 2013
(15 000 * 9/12)
Actual
2012
WANOS
2012
50 000
10 000
50 000
2 500
60 000
60 000
60 000
52 500
15 000
75 000
11 250
71 250
_____60 000
_____52 500
Dividend /
share
30 000
75 000
= R0.40
Earnings /
share
114 000
71 250
= R1.60
Dividend /
share
15 000
60 000
R0.25
Earnings /
share
84 000
52 500
= R1.60
Note:
•
•
•
The number of shares is used and not the Rand value.
Shares are only weighted from the date on which they are issued to the
financial year-end.
The actual number of shares is used for the calculation of the ordinary
dividend per share compared to the WANOS, which is used for the
calculation of the earnings per share.
Receipt of consideration on another date other than the date of issue
The date on which the cash or other consideration for the issue is receivable
is used when shares are weighted, if it differs from the actual date of issue.
IAS33 provides the following examples, amongst others:
•
Ordinary shares issued for cash are included on the date on which the
cash is receivable.
•
Ordinary shares issued on the voluntary reinvestment of dividends from
ordinary or preference shares are included when the dividends are
reinvested for example in species dividends.
•
Ordinary shares issued in exchange for the settlement of a liability of the
entity are included from the settlement date.
•
Ordinary shares issued as payment for the acquisition of an asset (other
than cash) are included from the day on which the acquisition is
recognised.
•
Ordinary shares issued for the payment of services that were provided to
the entity are included as the services are rendered.
4-4
Example 2
On 28 February 2012, B Ltd. issued 10 000 ordinary shares to F Ltd. As
consideration, F Ltd. must pay R20 000 to B Ltd. on 31 March 2012.
In this instance, the shares will be weighted from 31 March 2012, the date at
which the consideration was receivable and not from 28 February 2012, the
actual date of issue.
Shares issued for no consideration
In some instances, ordinary shares are issued without any consideration
receivable. IAS33 contains the following examples:
•
•
•
A capitalisation issue (also referred to as a bonus issue)
A share split
A bonus element in a rights issue to existing shareholders (FR389)
When this type of issue occurs, the WANOS must be restated for all prior
periods. The earnings per share for prior periods (comparative figures) must
therefore also be restated.
As the comparative figure is going to differ from the earnings per share that
was disclosed in the prior year’s financial statements, the fact that it has been
restated must be communicated to the users of the financial statements in a
note to the financial statements.
Capitalisation issues and share splits
A capitalisation issue is an issue of ordinary shares with no receipts of cash or
resources by the company in return. It is given to the shareholders instead of
a dividend.
It is usually issued in a ratio to a shareholders’ existing
shareholding (e.g. a capitalisation issue of 1:10; one share is issued for every
ten shares held. A shareholder who had 20 shares before the capitalisation
issue will have 22 shares after the capitalisation issue). A capitalisation issue
only consists of a capitalisation of the existing reserves.
(Dr Retained earnings, Cr Share capital)
A share split is similar to a capitalisation issue in that ordinary shares are
issued with no receipts of cash or resources in return. However, it is structured
differently in that the existing shares are split into a new number of shares to
improve marketability of the shares. (e.g. a share split of three shares for every
two shares previously held; a shareholder with two shares before the split will
have three shares after the share split). A share split has no impact on the
statement of changes in equity as it is not a capitalisation of the reserves but
rather an amendment to the class of share.
With both a capitalisation issue and a share split, no new capital flows into the
enterprise. No increase in future earnings can therefore be expected because
of a capitalisation issue or a share split as no new funds are injected that could
generate earnings.
4-5
The number of shares will however increase with the result that the earnings
per share will decline. If the comparative figures are not restated, the
comparative figures will not be useful. (Refer to example 9.3).
Share consolidation
A share consolidation is a reduction in the number of ordinary shares without
paying resources to the shareholders in return. This implies that there will be
no reduction in the resources available to generate future earnings per share.
Existing shares are consolidated into a new number of shares. (e.g. a share
consolidation of three shares for every five shares previously held. A
shareholder who held ten shares before the share consolidation will hold six
shares thereafter).
The number of shares will however decrease with the result that the earnings
per share will increase. If the comparative figures are not restated, the
comparative figures will not be useful. (Refer to example 9.3).
Rights issue
A rights issue is a right given to existing shareholders to take up additional
shares in the company at a pre-determined price. This price can either be the
market price or below the market price of the shares. A rights issue at market
price is treated exactly like an ordinary share issue for earnings per share.
Rights issues below market price, for the purposes of the calculation of
earnings per share, will be discussed in FA389.
4-6
Example 3
The following information of C Ltd. is available:
Since 1 January 2012, the capital structure of C Ltd. consisted of 100 000 ordinary
shares. Dividends were declared as follows: R75 000 for 2012 and R90 000 for 2013.
C Ltd. has a 31 December financial year end.
2013
R
450 000
Earnings for the purposes of basic EPS
2012
R
315 500
On 1 July 2012 another 50 000 ordinary shares were issued.
On 1 January 2013, C Ltd. had a capitalisation issue of one share for every two shares
previously held by the shareholders.
Calculations:
Adjust the figures for 2012 with the ratio of the capitalisation issue of 1:2.
2013
Actual
1 January 2012
Ordinary issue
(1/7/12)
1 January 2013
Capitalisation issue
2013
WANOS
2012
Actual
2012
WANOS
100 000
50 000
100 000
25 000
150 000
150 000
150 000
125 000
(150’x1/2)
(150’x1/2)
(150’x1/2)
(125’x1/2)
75 000
225 000
75 000
225 000
75 000
225 000
62 500
187 500
DPS
90 000
225 000
EPS
450 000
225 000
DPS
75 000
225 000
EPS
315 500
187 500
= R0.40
= R2.00
= R0.33
= R1.68
4-7
Disclosure 2012:
C LTD.
STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEAR ENDED 31 DECEMBER 2012
Notes
Profit for the year
Basic earnings per share
2012
R
315 500
2011
R
xxx
2.52
x
4
STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 31 DECEMBER 2012
Dividend per ordinary share
5
2012
0. 50
2011
x
NOTES TO THE FINANCIAL STATEMENTS
4.
Basic earnings per share
The calculations of basic earnings per share is based on earnings of
R315 500 (2011: Rxxx) and a weighted average number of ordinary
shares of 125 000 (2011: xxx).
5.
Dividend per share
The actual dividend paid in 2011 was Rx per share and was adjusted in
the 2012 statements for the capitalisation issue on x. The number of
shares on which the calculation for dividend per share was based, is the
shares actually entitled to dividends adjusted with the effect of any later
share issues which were issued at no value.
Disclosure 2013:
C LTD.
STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEAR ENDED 31 DECEMBER 2013
Notes
Profit for the year
Basic earnings per share
4
2013
R
450 000
2012
R
315 500
2.00
1.68
4-8
STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 31 DECEMBER 2013
Dividend per ordinary share
5
2013
0. 40
2012
0.33
NOTES TO THE FINANCIAL STATEMENTS
4.
Basic earnings per share
The calculations of basic earnings per share is based on earnings of
R450 000 (2012: R315 500) and a weighted average number of ordinary
shares of 225 000 (2012: R 187 500), after adjustments had been made
for the capitalisation issue on 1 January 2013. The basic earnings per
share for 2012 have been adjusted accordingly.
5.
Dividend per share
The actual dividend paid in 2012 was R0.50 per share and was adjusted
in the 2013 statements for the capitalisation issue on 1 January 2013.
The number of shares on which the calculation for dividend per share
was based, is the shares actually entitled to dividends adjusted with the
effect of any later share issues which were issued at no value.
Why were the 2012 figures restated?
Basic earnings per share for 2013 is R2.00 (R450 000/225 000). If the figure for 2012
was not retrospectively adjusted, the basic earnings per share for 2012 would be R2.52
(R315 500/125 000). It would then have appeared that the basic earnings per share
declined by R0.52 (R2.52 – R2.00), whilst the total basic earnings per share attributed
to the same number of shareholders of the company in fact increased from 2012 to
2013. To avoid this inconsistency, the figures for 2012 were restated and the restated
basic earnings per share will amount to R1.68 (R315 500/187 500). The amended
basic earnings per share is then the comparative figure (2012) in the 2013 financial
statements.
4.4
DILUTED EARNINGS PER SHARE
Note: This chapter does not cover the calculation of diluted earnings per
share
IAS33 recognises two types of shares:
−
ordinary shares and
−
potential ordinary shares.
Ordinary shares form the basis for the calculation of the basic earnings per
share. According to IAS33, a potential ordinary share is a financial instrument
or other contract that entitles the holder thereof to ordinary shares.
4-9
Examples of potential ordinary shares are inter alia:
•
•
•
Preference shares convertible to ordinary shares
Debentures convertible to ordinary shares
Ordinary shares that will be issued depending on certain conditions that
must be complied with
Potential ordinary shares are therefore ordinary shares that will possibly be
issued in future and can lead to a dilution (reduction) in the future earnings per
share. IAS33 requires that if a potential dilution exists, diluted earnings per
share along with the basic earnings per share must be calculated and
disclosed.
4.5
HEADLINE EARNINGS PER SHARE (circular letter 7/2002)
Note: This chapter does not discuss the calculation of headline earnings
per share.
The basic earnings per share figure that is calculated according to IAS33 can
vary because of the inclusion of inter alia items of a capital nature. This
variability, if significant, will prejudice the usefulness of earnings per share.
Headline earnings per share attempt to eliminate this variability by setting more
specific requirements in respect of which items must be included or excluded
in the calculation of earnings.
4.6
DIVIDEND PER SHARE
The calculation of ordinary dividend per share is not dealt with by IAS33. IAS
1 requires that a company must disclose the ordinary dividend per share. No
specific guidelines are however provided for the calculation of the ordinary
dividend per share.
However, dividends per share are generally calculated by dividing the
dividends paid or declared by the number of shares issued on the last date for
registration (LDR). (Refer to example 1.)
The last date for registration is the date on which you must be a shareholder
to qualify for the dividends. The comparability of the ordinary dividend per
share will be promoted if dividends per share for past years are restated in the
case of a capitalisation issue or any other issue where no consideration is
received as is the case for EPS. (The same as EPS in example 3.)
4.7
PRESENTATION AND DISCLOSURE
The following must be disclosed on the face of the statement of comprehensive
income:
•
•
The basic earnings / loss per share for every type of ordinary share.
The dilutive earnings / loss per share for every type of ordinary share (if
there is one). (FA389)
4 - 10
•
The headline earnings / loss per share for every type of ordinary share (if
there is one). (Hons Fin Acc)
IAS33 requires that the following must inter alia be disclosed with respect to
the basic earnings per share:
•
•
The earnings that were used in the calculation of the earnings per share.
A reconciliation between these earnings and the profit or loss for the
period according to the statement of comprehensive income.
•
The weighted average number of ordinary shares which is used in the
calculation of the earnings per share.
If the earnings per share for the prior year are restated, this fact must be
disclosed.
•
The ordinary dividend per share should be disclosed in the notes to the
financial statements.
4.8
SCHEMATIC REPRESENTATION
The above-mentioned can be presented by the following schematic
representation:
IAS33
IAS 1
Earnings per share
Ordinary dividend per
share
Headline
earnings per
share
(circular
7/2002)
Dilutive
earnings per
share
Basic
earnings per
share
Profit for the year
• after taxation
• after preference
dividends
Earnings
WANOS
Ordinary issue
Capitalisation issue
Repurchase of shares
Rights issue at market value
(FA288)
4 - 11
CHAPTER 4
EARNINGS PER SHARE
QUESTIONS
Page
Question 4.1:
Basic calculation and disclosure
13
Question 4.2:
Capitalisation issue, exchange transaction, share buy-back
15
Question 4.3:
Capitalisation issue, share split
17
Question 4.4:
Capitalisation issue, share issue, share buy-back
20
Question 4.5:
Share issue, share buy-back
24
Question 4.6:
Share consolidation, capitalisation issue, buy-back of shares
26
Question 4.7:
Share consolidation, share issue, buy-back of shares
29
Question 4.8:
Buy-back of shares, share split
33
Question 4.9:
Rights issue, buy-back of shares, capitalisation issue
36
Question 4.10:
Combination of chapters 3 and 4
40
Question 4.11:
Exam question 2016: November
44
4 - 12
QUESTION 4.1
Peer Ltd. was registered on 1 January 2012 with the following authorised share capital:
•
•
200 000 ordinary shares.
50 000 cumulative preference shares.
The preference shares earn dividends at 20c per share per year.
Additional information:
1.
2.
Shares were issued as follows:
•
50 000 ordinary shares on 1 January 2012 at R1.05 each
•
The attorney of the company received 12 000 ordinary shares at R1 each
as compensation for services rendered. He performed his duties on
30 June 2012.
•
5 000 preference shares on 1 January 2012 at R2.50 each
•
10 000 ordinary shares on 30 September 2012 at R1.10 each
•
10 000 ordinary shares on 31 March 2013 at R1.15 each
•
20 000 ordinary shares were issued in exchange for an asset received on
30 June 2013.
Profit after taxation for 2012 and 2013 was R121 000 and R171 000
respectively. Ordinary dividends paid and declared on 31 December, the year
end, were R15 000 for both 2012 and 2013.
YOU ARE REQUIRED TO:
(a) calculate and disclose the profit for the year and basic earnings per share in the
statement of comprehensive income and the appropriate notes for the year ended
31 December 2013. Your answer must comply with the requirements of IAS 33
and IAS 1.
(b) calculate and disclose the ordinary dividend per share in the statement of changes
in equity for the year ended 31 December 2013. Your answer must comply with
the requirements of IAS 33 and IAS 1. The dividend per share note is not required.
4 - 13
QUESTION 4.1 (Suggested solution)
a)
PEER LTD.
STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEAR ENDED 31 DECEMBER 2013
Note
2013
R
2012
R
Profit for the year
Basic earnings per share
4
NOTES TO THE FINANCIAL STATEMENTS
4.
Basic earnings per share
The calculation of basic earnings per share is based on earnings of
R_________ (2012: R__________) and on the weighted average number
of ordinary shares in issue of ________ (2012: _________).
Reconciliation of earnings with profit for the year
2013
R
2012
R
Profit for the year
Less: Preference dividends
Earnings attributable to ordinary shareholders
Calculations:
2013
Actual
WANOS
2012
Actual WANOS
Balance 1/1/2012
Share issues:
- attorney: 30/6/2012 (*6/12)
- 30/9/2012 (*3/12)
Share issues:
- 31/3/2013 (*9/12)
- asset 30/6/2013 (*6/12)
72 000
72 000
10 000
20 000
102 000
DPS
7 500
10 000
89 500
EPS
72 000
DPS
58 500
EPS
b)
STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 31 DECEMBER 2013
2013
Dividend per ordinary share
2012
5
4 - 14
QUESTION 4.2
An inexperienced accountant prepared the following abridged statement of
comprehensive income of Lemoen Ltd. for the years ended 31 August.
Profit before tax
Income tax expense
Profit for the year
2013
R
127 500
(67 000)
60 500
2012
R
135 000
(53 000)
82 000
Additional information:
1.
The authorised share capital is as follows:
•
•
2.
100 000 Ordinary shares
100 000 Non-cumulative preference shares
The following shares were issued:
o 40 000 ordinary shares at R1,20 each on 1 September 2011, in exchange
for property registered in the name of Lemoen Ltd. on 1 October 2011.
o 50 000 preference shares on 28 February 2012.
3.
The following transactions, amongst others, took place during the course of the
year ended 31 August 2013:
•
•
•
On 31 May 2013, the company bought 10 000 ordinary shares back at
R1,50 per share. The company met all legal requirements.
Preference dividends of R7 500 were paid for 2013 and no preference
dividend was paid in 2012.
Capitalisation issue of one ordinary share for every three held was made on
1 August 2013.
YOU ARE REQUIRED TO:
calculate and disclose the profit for the year and basic earnings per share in the
statement of comprehensive income and the appropriate notes for the year ended 31
August 2013. Your answer must comply with the requirements of IAS 33 and IAS 1.
4 - 15
QUESTION 4.2 (Suggested solution)
LEMOEN LTD.
STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEAR ENDED 31 AUGUST 2013
Note
2013
R
2012
R
Profit for the year
Basic earnings per share
4
NOTES TO THE FINANCIAL STATEMENTS
4.
Earnings per share
The calculation of basic earnings per share was based on earnings of R_______
(2012: _____________) and on the weighted average number of shares of
_____________ (2012: _____________), after adjustment for a capitalisation
issue on 1 August 2013. The basic earnings per share for 2012 were accordingly
adjusted.
Reconciliation of earnings with Profit for the year
2013
R
2012
R
Profit for the year
Less : Preference dividends
Earnings attributable to ordinary shareholders
Calculations:
2013
Actual
WANOS
2012
Actual
WANOS
Balance 01/09/2011
Share issue 1/10/2011
Buy-back of shares 31/05/2013
Capitalisation issue 1/08/2013 (1:3)
4 - 16
QUESTION 4.3
The following is an abridged statement of comprehensive income of Appel Ltd. for the
years ended 31 March:
Profit before tax
Income tax expense
Profit for the year
2013
R
4 049 250
(1 636 750)
2 412 500
2012
R
3 177 300
(1 313 300)
1 864 000
Additional information:
1.
On 1 April 2011, the issued ordinary shares capital of Appel Ltd. consisted of
1 800 000 shares that were issued at R1 each.
2.
The following ordinary shares were issued:
3.
•
On 31 July 2011, the company issued 450 000 shares for cash.
•
On 1 August 2012, the company made a capitalisation issue of three shares
for every ten held previously.
•
On 31 December 2012, the company issued 325 000 shares at market value.
•
On 31 January 2013, the company made the following share-split: Two shares
in replacement of every one share previously held.
Dividends on ordinary shares of R1 100 000 were declared and paid on 31 March
2013 (31 March 2012: R950 000).
YOU ARE REQUIRED TO:
calculate and disclose the profit for the year, basic earnings and ordinary dividend per
share in the financial statements and the appropriate notes for the year ended 31
March 2013. Your answer must comply with the requirements of IAS 33 and IAS 1.
4 - 17
QUESTION 4.3 (Suggested solution)
APPEL LTD.
STATEMENT OF COMPREHENSIVE INCOME FOR
THE YEAR ENDED 31 MARCH 2013
Note
2013
R
2012
R
Profit for the year
Basic earnings per share
4
STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 31 MARCH 2013
2013
Dividend per ordinary share
2012
5
NOTES TO THE FINANCIAL STATEMENTS
4.
Basic earnings per share
The calculation of basic earnings per share was based on earnings of
R_________ (2012: R__________) and on the weighted average number of
ordinary shares of ____________ (2012: __________) after a capitalisation
issue on 1 August 2012 and a share split on 31 January 2013. The basic earnings
per share for 2012 have been adjusted accordingly.
5.
Dividend per share
The actual dividend paid in 2012 was R_____ per share and was adjusted in the
2013 statements for the capitalisation issue on 1 August 2012 and share split on
31 January 2013. The number of shares on which the calculation for dividend per
share was based, is the shares actually entitled to dividends adjusted with the
effect of any later share issues which were issued at no value.
4 - 18
Calculations:
2013
Actual
WANOS
2012
Actual
WANOS
Balance 1/4/2011
Share issue - 31/7/2011
- 450 000 x 8/12
Capitalisation issue
1/08/2012
- 2 250 000 x 3/10
- 2 100 000 x 3/10
Share issue - 31/12/2012
- 325 000 x 3/12
Share split – 31/01/2013
(1:1)
4 - 19
QUESTION 4.4
An inexperienced accountant drafted the following abridged statement of
comprehensive income and statement of changes in equity of Polka Ltd. for the years
ended 30 June.
Profit before tax
Income tax expense
Profit on sale of land
Profit for the year
2013
R
570 000
(140 000)
430 000
40 000
470 000
2012
R
430 000
(110 000)
320 000
320 000
Additional information:
1.
Issued share capital of Polka Ltd. on 1 July 2011 was as follows:
• 220 000 ordinary shares
• 160 000 non-cumulative preference shares
2.
Shares were issued as follows:
•
On 30 September 2011 the company issued 30 000 ordinary shares for cash
at R2.20 each.
•
Preference dividends and ordinary dividends of R26 000 and R15 000
respectively were declared and paid on 30 June 2012.
•
The share transactions for 2012/13 are disclosed in the statement of changes
in equity.
•
The capitalisation issue on 31 January 2013 is one ordinary share for every
eleven shares held.
4 - 20
POLKA LTD.
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2013
(Excluding preference shares)
Date
Description
Ordinary
RevalRetained
shares
uation
earnings
reserve
R
R
R
01/7/12
Balance
550 000
150 000
300 000
31/8/12
Issue of 60 000 shares
120 000
31/12/12
31/1/13
30/5/13
30/6/13
30/6/13
Issue of 20 000 shares
40 000
Capitalisation of 30 000 shares
Buy back of 24 000 shares
Dividends:
Preference
Ordinary
Profit for the year
60 000
(60 000)
710 000
(60 000)
150 000
(37 500)
(12 500)
470 000
660 000
YOU ARE REQUIRED TO:
calculate and disclose the profit for the year, basic earnings and ordinary dividend per
share in the financial statements and the appropriate notes for the year ended 30 June
2013. Your answer must comply with the requirements of IAS 33 and IAS 1.
4 - 21
QUESTION 4.4 (Suggested solution)
POLKA LTD.
STATEMENT OF COMPREHENSIVE INCOME FOR
THE YEAR ENDED 30 JUNE 2013
Note
2013
R
2012
R
Profit for the year
Basic earnings per share
4
STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 31 MARCH 2013
2013
Dividend per ordinary share
2012
5
NOTES TO THE FINANCIAL STATEMENTS
4.
Basic earnings per share
The calculation of basic earnings per share is based on earnings of R__________
(2012: R____________) and weighted average number of ordinary shares of
____________ (2012: ______________), after adjustments for a capitalisation
issue on 31 January 2013. The basic earnings per share for 2012 have been
adjusted accordingly.
Reconciliation of earnings with profit for the year
2013
R
2012
R
Profit for the year
Less: Preference dividend
Earnings attributable to ordinary shareholders
5.
Dividend per share
The actual dividend paid in 2012 was R_____ per share and was adjusted in the
2013 statements for the capitalisation issue on 31 January 2013. The number of
shares on which the calculation for dividend per share was based, is the shares
actually entitled to dividends adjusted with the effect of any later share issues
which were issued at no value.
4 - 22
Calculations:
Number of shares
Actual
2013
WANOS
Actual
2012
WANOS
Balance 1 July 2011
Share issue 30/9/2011
Balance 1/7/2012
Share issue 31/8/2012
Share issue 31/12/2012
Capitalisation-issue 31/1/2013
Buy back of shares
30/05/2013
4 - 23
QUESTION 4.5
An inexperienced accountant drafted the following abridged
comprehensive income of Naartjie Ltd. for the years ended 30 June:
statement of
2013
R
210 000
(107 000)
103 000
Profit before tax
Income tax expense
2012
R
150 000
(53 000)
97 000
Additional information:
1.
The issued share capital as at 1 July 2011 was as follows:
• 200 000 ordinary shares (issued at R1 each)
• 150 000 non-cumulative preference shares (issued at R1 each)
2.
On 1 October 2011, 40 000 ordinary shares were issued at R1,20 each.
3.
The company did not declare or pay any dividends for the year ended
30 June 2012.
4.
The following preference dividends were paid in the respective years:
• 2012
R15 000
• 2013
R15 000
5.
The following
30 June 2013:
•
•
•
share
transactions
occurred
during
the
year
ended
On 31 January 2013, the company bought-back 30 000 ordinary shares at
R1,60 per share. The company met all legal requirements.
A capitalisation issue of one ordinary share for every three held was made
on 1 April 2013.
An ordinary dividend of R25 000 was declared on 31 March 2013
YOU ARE REQUIRED TO:
(a) calculate and disclose the profit for the year, basic earnings per share in the
statement of comprehensive income and the appropriate notes for the year ended
30 June 2013. Your answer must comply with the requirements of IAS 33 and IAS
1.
(b) calculate and disclose the ordinary dividend per share in the statement of changes
in equity for the year ended 30 June 2013. Your answer must comply with the
requirements of IAS 33 and IAS 1. The dividend per share note is not required.
4 - 24
QUESTION 4.5 (Suggested solution)
(a)
NAARTJIE LTD.
STATEMENT OF COMPREHENSIVE INCOME FOR
THE YEAR ENDED 30 JUNE 2013
Note
2013
R
2012
R
Profit for the year
Basic earnings per share
4
NOTES TO THE FINANCIAL STATEMENTS
4.
Earnings per share
The calculation of basic earnings per share is based on earnings of
R_________ (2012: R__________) and on the weighted average number
of ordinary shares of _________ (2012: _________), after a capitalisation
issue on 1 April 2013. The basic earnings per share for 2012 were adjusted
accordingly.
Reconciliation of earnings with profit for the year
2013
R
2012
R
Profit for the year
Less: Preference dividend
Earnings attributable to ordinary shareholders
Calculations:
2013
Actual
WANOS
2012
Actual
WANOS
Balance 1 July
Share issue 1/10/2011
Balance 1 July
Buy-back
31/01/2013
of
shares
Capitalisation issue 1/4/2013
b)
STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 30 JUNE 2013
2013
Dividend per ordinary share
2012
5
4 - 25
QUESTION 4.6
An inexperienced accountant drafted the following abridged statement of changes in
equity for Soccer Ltd. for the year ended 30 June 2013.
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2013
(Excluding preference shares)
Date
Description
Ordinary
Retained
shares
Earnings
R
R
01/07/12 Balance
885 000
665 000
01/10/12
01/10/12
Share issue 130 000 shares
Rights issue @ market value - 50 000 shares
31/12/12
31/03/13
31/03/13
15/05/13
30/06/13
Capitalisation of Shares (1:10)
Dividends: Preference
Dividends: Ordinary
Buy back of 40 000 shares
Total comprehensive income for the year
125 500
67 000
83 000
(75 000)
1 085 000
(83 000)
(32 000)
(65 000)
(25 000)
570 000
1 030 000
Additional information:
1.
Issued share capital of Soccer Ltd. on 1 July 2011 was as follows:
•
•
2.
1 200 000 ordinary shares;
160 000 cumulative preference shares.
Shares were issued as follows:
•
On 1 October 2011 the company issued 100 000 ordinary shares for cash at
R1.50 each. Share issue costs amounted to R10 000.
•
The share transactions for 2012/13 are disclosed in the statement of changes
in equity.
3.
The profit after tax for 2012 was R460 000.
4.
Preference dividends of R32 000 were declared and paid on 31 March 2013.
5.
The directors consolidated the ordinary shares to one share instead of every two
shares held on 31 July 2012.
6.
The capitalisation issue on 31 December 2012 was one ordinary share for every
ten shares held.
7.
The preference shares earn dividends at 10c per share per year.
4 - 26
YOU ARE REQUIRED TO:
(a) calculate and disclose the profit for the year, basic earnings per share in the
statement of comprehensive income and the appropriate notes for the year ended
30 June 2013. Your answer must comply with the requirements of IAS 33 and IAS
1.
(b) calculate and disclose the ordinary dividend per share in the statement of changes
in equity for the year ended 30 June 2013. Your answer must comply with the
requirements of IAS 33 and IAS 1. The dividend per share note is not required.
4 - 27
QUESTION 4.6 (Suggested solution)
SOKKER LTD.
STATEMENT OF COMPREHENSIVE INCOME FOR
THE YEAR ENDED 30 JUNE 2013
Note
2013
R
2012
R
Profit for the year
Basic earnings per share
4
Notes to the financial statements
4. Earnings per share
The calculation of basic earnings per share was based on earnings of _____________
(2012: _______________________) and on the weighted average number of ordinary
shares of _____________ (2012: ______________), after an adjustment for share
consolidation
on
31 July 2012
and
a
capitalisation
issue
on
31 December 2012. The basic earnings per share for 2012 were accordingly adjusted.
Reconciliation of earnings for the year
2013
R
2012
R
Net profit for the year
Less preference dividends
Earnings attributable to ordinary shareholders
Calculations:
Number of shares
Actual
2013
WANOS
Actual
2012
WANOS
Balance 1 July 2011
Share issue 01/10/2011
Balance 01/7/2012
Share consolidation 31/07/12
New balance
Share issue 01/10/2012
Rights issue @ mv 01/10/2012
Total
Capitalisation issue (1:10) 31/12/2012
Buy back of shares 15/05/2013
b)
STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 30 JUNE 2013
2013
Dividend per ordinary share
5
2012
-
4 - 28
QUESTION 4.7
IPaid Ltd. was registered on 1 January 2008 with the following authorised share capital:
• 5 000 000 ordinary shares
• 500 000 non-cumulative preference shares
Additional information:
1.
On 1 January 2011 IPaid Ltd.’s issued share capital was as follows:
• 1 500 000 ordinary shares
• 400 000 non-cumulative preference shares
2.
Share transactions were as follows during the 2011 financial year:
• A share issue of 1 200 000 ordinary shares at R2.50 each was made on
1 March 2011.
• IPaid Ltd. purchased land on 1 June 2011 for a price of R700 000. The
purchase price was settled through an issue of ordinary shares at a value
of R2.50 per share. The land was transferred on 1 July 2011.
3.
Share transactions were as follows during the 2012 financial year:
• A further 80 000 non-cumulative preference shares were issued at
R3.00 each on 1 January 2012.
• A share issue of 600 000 ordinary shares at R2.50 each was made on
1 February 2012.
• The directors consolidated the ordinary shares by replacing every three
shares held with one share on 31 July 2012.
• IPaid Ltd. bought back 200 000 ordinary shares at R7.50 per share on
31 October 2012. All the legal requirements were met.
4.
Total comprehensive income was R1 200
31 December 2012 (2011: R1 000 000).
000
for
the
year
5.
Dividends were only declared and paid on 30 September 2012 as follows:
ended
• R500 000 - ordinary shares
• R80 000 - preference shares
4 - 29
YOU ARE REQUIRED TO:
(a) calculate and disclose the profit for the year, basic earnings per share in the
statement of comprehensive income and the appropriate notes for the year ended
31 December 2012. Your answer must comply with the requirements of IAS 33
and IAS 1.
(b) calculate and disclose the ordinary dividend per share in the statement of changes
in equity for the year ended 31 December 2012. Your answer must comply with the
requirements of IAS 33 and IAS 1. The dividend per share note is not required.
(c) calculate the basic earnings attributable to the ordinary shareholders of
IPaid Ltd. for the years ended 31 December 2012 and 2011 if you assume that the
preference shares are cumulative and earn dividends at 10c per share per annum.
4 - 30
QUESTION 4.7 (Suggested solution)
(a)
IPAID LTD.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDING 31 DECEMBER 2012
Note
2012
R
2011
R
Profit for the year
Basic earnings per share
4
Notes to the financial statements
4.
Earnings per share
The calculation of basic earnings per share is based on earnings of
R_____________ (2011: R____________) and on a weighted average number
of ordinary shares of ____________ (2011: __________), after a share
consolidation on 31 July 2012. The basic earnings per share for 2011 was
adjusted accordingly.
Reconciliation of earnings with profit for the year
2012
R
2011
R
Profit for the year
Less: Preference dividends
Earnings attributable to ordinary shareholders
Calculation
Number of shares
2012
Actual
WANOS
2011
Actual
WANO
S
Balance 1 January 2011
Share - issue 1/3/ 2011
Share - issue 1/7/ 2011
(700 000/2.5)
Balance 1/1/2012
Share issue 1/2/2012
Share consolidation
31/07/2012
Buy-back of shares
31/10/2012
4 - 31
b)
STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 31 DECEMBER 2012
2012
Dividend per ordinary share
2011
5
c)
Profit for the year
Less: Preference dividends
Earnings attributable to ordinary shareholders
4 - 32
QUESTION 4.8
SuggestInvest Ltd. is in the process of compiling their annual financial statements for
the year ended 28 February 2013 and have requested your assistance in the
presentation of earnings per share.
The following extract was taken from the statement of financial position at 28 February
2011:
Equity
Ordinary share capital (75 000 issued shares)
Cumulative preference share capital (50 000 issued shares)
Retained earnings
R
262 500
150 000
845 955
Additional information:
1.
During the 2012 and 2013 financial years the following ordinary share
transactions took place:
•
•
•
•
30 April 2011
30 September 2011
30 June 2012
30 September 2012
•
1 December 2012
–
–
–
–
50 000 shares issued at R3.45 each
10 000 shares were repurchased
25 000 shares issued at R3.30 each
share split of three shares in replacement of
every two shares previously held
– 15 000 shares issued at R3.42 each
2.
On 30 November 2012, 40 000 additional cumulative preference shares were
issued at R5.00 per share. These preference shares earn dividends at 15c per
share per annum.
3.
Ordinary
dividends of
R36 600
were
28 February 2013 (28 February 2012: R42 000).
4.
The profit before tax for the 2012 and 2013 financial years amounted to R452 219
and R370 701 respectively. Assume that the profit before tax was equal to the
taxable income.
5.
Assume the current tax rate is 27%.
declared
and
paid
on
YOU ARE REQUIRED TO:
calculate and disclose the profit for the year, basic earnings and ordinary dividend per
share in the financial statements and the appropriate notes of SuggestInvest Ltd. for
the year ended 28 February 2013. Your answer must comply with the requirements of
IAS 33 and IAS 1.
4 - 33
QUESTION 4.8 (Suggested solution)
SuggestInvest Ltd.
Statement of comprehensive income for the year ended 28 February 2013
Notes
2013
R
2012
R
Profit for the year
Basic earnings per share
4
Statement of changes in equity for the year ended 28 February 2013
2013
Dividend per ordinary share
2012
5
Notes to the financial statements:
4.
Basic earnings per share
The calculation of basic earnings per share is based on earnings of R___________
(2012: R__________) and on the weighted average number of issued shares of
___________ (2012: __________), after adjustment for the share split on 30
September 2012. The basic earnings per share for 2012 were adjusted accordingly.
Reconciliation of earnings with profit for the year
2013
R
Profit for the year
Less: Preference dividends
Earnings attributable to ordinary
shareholders
5.
2012
R
Dividend per share
The actual dividend paid in 2012 was R_____ per share and was adjusted in the
2013 statements for the share split on 30 September 2012. The number of shares
on which the calculation for dividend per share was based, is the shares actually
entitled to dividends adjusted with the effect of any later share issues which were
issued at no value.
4 - 34
Calculations:
1) Number of shares & EPS & DPS:
2013
Date
01-Mar-11
30-Apr-11
30-Sep-12
28-Feb-12
30-Jun-12
30-Sep-12
30-Sep-12
Description
Opening
balance
Share issue
(50000*10/12)
Repurchase
(10 000*5/12)
Closing
balance
Share issue
(25 000*8/12)
Sub total
Share split
(140 000/2*1)
(131 667/2*1)
(115 000/2*1)
(112 500/2*1)
Actual
2012
WANOS
Actual
WANOS
115 000
25 000
140 000
70 000
210 000
01-Dec-12 Share issue
(15 000*3/12)
Closing
28-Feb-13 balance
15 000
225 000
2013
DPS
2012
EPS
DPS
EPS
2) Profit for the year:
3) Cumulative preference dividend:
4 - 35
QUESTION 4.9
The following is the abridged statement of changes in equity of Citco Ltd. for the year
ended 28 February 2014, as prepared by their accountant:
Statement of changes in equity for the year ended 28 February 2014
Date
01/03/2013
30/06/2013
30/11/2013
28/02/2014
28/02/2014
28/02/2014
Description
Balance
Buy back of shares
Capitalisation shares
Ordinary dividend
Preference dividend
Profit before tax
Ordinary
shares
R
3 437 500
(312 500)
218 750
3 343 750
Retained
earnings
R
3 450 000
(37 500)
(218 750)
(415 000)
(336 000)
2 090 959
4 533 709
Additional information:
1.
Citco Ltd.’s issued share capital was as follows on 1 March 2012:
• 1 750 000 ordinary shares
• 400 000 cumulative preference shares that earn dividends at 28c per share
per annum
2.
Total comprehensive income (after taxation) was R980 000 for the year ended
28 February 2013.
3.
Shares were issued as follows during the year ended 28 February 2013:
• 750 000 ordinary shares were issued at R2 each on 1 October 2012. The
shares were issued in settlement of the loan from Fedbank. According to the
agreement, the loan was settled on 31 October 2012.
• A rights issue of one ordinary share for every ten held took place on
1 December 2012 at market price. All rights issues were taken up.
4.
The share transactions for the year ended 28 February 2014 are disclosed in the
statement of changes in equity.
5.
Citco Ltd. bought back ordinary shares
30 June 2013. All legal requirements were met.
6.
The capitalisation issue on 30 November 2013 was one ordinary share for every
twenty held.
7.
Assume a tax rate of 27% and that the profit before tax is equal to the taxable
income.
at
R1.40
per
share
4 - 36
on
YOU ARE REQUIRED TO:
(a) calculate and disclose the profit for the year, basic earnings per share in the
statement of comprehensive income and the appropriate notes for the year ended
28 February 2014. Your answer must comply with the requirements of IAS 33 and
IAS 1.
(b) calculate and disclose the ordinary dividend per share in the statement of changes
in equity for the year ended 28 February 2014. Your answer must comply with the
requirements of IAS 33 and IAS 1. The dividend per share note is not required.
4 - 37
QUESTION 4.9 (Suggested solution)
(a)
Citco Ltd.
Statement of comprehensive income for the year ended 28 February 2014
Notes
2014
R
2013
R
Profit for the year
Basic earnings per share
4
Notes to the financial statements
4.
Earnings per share
The calculation of basic earnings per share is based on earnings of
R_____________ (2013: _____________) and the weighted average number of
issued shares of _____________ (2013: _____________), after adjustment for the
capitalisation issue on 30 November 2013. The basic earnings per share for 2013 were
adjusted accordingly.
Reconciliation of earnings with profit for the period
2014
R
2013
R
Profit for the year
Less: Preference dividends
Earnings attributable to ordinary shareholders
Calculations:
Number of shares
2014
Actual
WANOS
2013
Actual
WANOS
Balance 01/03/2012
Share issue 31/10/2012
Balance
Rights issue 01/12/2012
Balance 28/02/2013
Buy back 30/06/2013
4 - 38
New balance
Capitalisation issue 30/11/2013
EPS =
DPS =
(b)
STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 28 FEBRUARY 2014
2014
Dividend per ordinary share
2013
5
4 - 39
QUESTION 4.10
The following balances appear on the records of YayHoliday Ltd., a company who
plans and sells holiday packages, on 31 December 2013:
Ordinary share capital (150 000 shares)
Cumulative preference share capital (20 000 shares)
Retained earnings
Revaluation reserve
R
350 000
28 000
135 000
45 000
Additional information:
1.
The shares were issued as follows:
100 000 ordinary shares at R2.00 each on 1 April 2008
50 000 ordinary shares at R3.00 each on 30 June 2013
20 000 cumulative preference shares at R1.40 each on 1 April 2008
2.
On 28 February 2014 an additional 15 000 ordinary shares were issued to the
public at R2.25 per share.
3.
A rights issue took place on 31 March 2014 at the market value of R2.30. Two
ordinary shares were offered for every five ordinary shares held. All shareholders
took up the offer.
4.
A further 2 000 preference shares were issued at R1.50 each on 31 March 2014.
5.
On 1 April 2014, YayHoliday Ltd. made a capitalisation issue of one ordinary
share for every five ordinary shares held. The market value per share on this date
was R2.40.
6.
On 1 September 2014 an ordinary dividend of R53 900 was declared and paid.
The preference shares earn a dividend of 30c per share per year, and the
previous preference dividend was declared on 1 October 2013. No ordinary
dividend was declared during the 2013 financial year.
7.
On 1 October 2014, 10 000 ordinary shares were bought back at R2.50 per share.
8.
The profit before tax amounted to R310 685 for the year ended
31 December 2014, and R157 808 for the year ended 31 December 2013.
Assume that the profit is fully taxable.
9.
Assume the tax rate is 27%.
4 - 40
YOU ARE REQUIRED TO:
a)
prepare the statement of changes in equity for the year ended
31 December 2014. Comparative figures AND the total column are not
required. The disclosure relating to dividend per share is not required.
b)
calculate the basic earnings per share and ordinary dividend per share for the
years ended 31 December 2014 and 2013.
Round all amounts to the nearest cent (except profit to the nearest Rand).
4 - 41
QUESTION 4.10 (Suggested solution)
a)
YAYHOLIDAY LTD.
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2014
Ordinary
Preference
Retained
Revaluation
shares
shares
earnings
reserve
Opening balance
31/12/2013
Shares issues
28/02/2014
Rights issue
31/03/2014
Preference shares issued
31/03/2014
Capitalisation issue
01/04/2014
Ordinary dividend declared
01/09/2014
Preference dividend declared
01/09/2014
Buy-back of shares
01/10/2014
Profit for the year
31/12/2014
Closing balance
31/12/2014
Calculations:
Ordinary dividend:
Preference dividend:
Profit for the year:
Opening balance
Share issue
Rights issue
Date
01/01/2014
28/02/2014
31/03/2014
Capitalisation issue
01/04/2014
Buy back
01/10/2014
Number of shares
Price
Total value
4 - 42
b)
EPS: WANOS
Actual
Opening balance
Shares issued (50 000 x 6/12)
30/06/2013
Shares issued (15 000 x 10/12)
Rights issue (66 000 x 9/12)
28/02/2014
31/03/2014
Capitalisation issue (1:5)
01/04/2014
Buy-back (10 000 x 3/12)
01/10/2014
2014
WANOS
Actual
EPS =
DPS =
EPS: Earnings
Profit after tax
Cumulative preference dividend
Profit attributable to ordinary shareholders
2014
4 - 43
2013
2013
WANOS
QUESTION 4.11
Swift Ltd. was registered on 1 June 2014 and has a financial year-end of
30 September. The company has the following authorised share capital:
•
•
600 000 ordinary shares
120 000 cumulative preference shares that earn dividends at 10c per share per
annum.
The following balances, among others, appeared in the records of Swift Ltd. on
1 October 2014:
Ordinary share capital (issued at R2 per share)
Cumulative preference share capital (120 000 issued shares)
Retained earnings
R
400 000
150 000
843 000
Additional information:
1.
Swift Ltd. issued 10 000 ordinary shares at R4 each on 1 January 2015.
2.
On 1 March 2015, Swift Ltd. bought back 15 000 ordinary shares at R4.75 per
share. All legal requirements were met.
3.
No dividends were declared during 2015.
4.
On 31 December 2015 Swift Ltd. offered two ordinary shares for every four
ordinary shares held to the current shareholders as a rights issue. All the rights
were exercised at the current market price of R5.15 per share.
5.
25 000 ordinary shares were issued at R5.65 each on 1 June 2016. The shares
were issued in settlement of the loan from Crawford Ltd. According to the
agreement, the loan was settled on 1 July 2016.
6.
On 1 September 2016 Swift Ltd. made a share-split where three ordinary shares
replaced every two ordinary shares previously held.
7.
An ordinary dividend of R32 000 and preference dividend of R24 000 were
declared on 30 September 2016.
8.
Profit after tax amounted to R970 000 (2015: R660 000) for the year ended
30 September 2016.
9.
Assume the tax rate is 27%.
4 - 44
YOU ARE REQUIRED TO:
a)
calculate and disclose the basic earnings per share for the year ended
30 September 2016 in the appropriate notes to the financial statements. Your
answer must comply with the requirements of IAS 33 and IAS 1. Comparative
figures are required.
b)
show the journal entry for the buy-back of shares on 1 March 2015.
c)
show the journal entry for the rights issue on 31 December 2015.
d)
show the journal entry if Swift Ltd. were to decide to do a rights issue at
R4.80 per ordinary share instead of at market value of R5.15 per share on
31 December 2015. The share ratio will remain the same.
Round all share prices off to the nearest cent.
Round all other amounts off to the nearest rand.
4 - 45
QUESTION 4.11 (Suggested solution)
a)
Notes to the financial statements:
4.
Basic earnings per share
The calculation of basic earnings per share is based on an earning of
R__________
(2015: R___________) and on the weighted average number of ordinary shares
of __________ (2015: ____________) , after adjustment for a share split on
1 September 2016. The basic earnings per share for 2015 was adjusted
accordingly.
Reconciliation of earnings with profit for the year
2016
R
2015
R
Profit for the year
Less: Preference dividends
Earnings attributable to ordinary shareholders
Calculations:
Number of shares
2016
Actual
2015
WANOS
Actual
WANOS
Balance 1/10/2014
Share issue 1/1/2015
Buyback 1/3/2015
Balance 1/10/2015
Right issue 31/12/2015
Share issue 1/7/2016
Share-split 1/9
EPS 2016 =
EPS 2015 =
4 - 46
Calculations:









b)
01/03
c)
31/12
d)
31/12
Dt Ordinary share capital
Dt Retained earnings
Cr Bank
Share buyback
Dt Bank
Cr Ordinary share capital
Rights issued @ market value
Dt Bank
Dt Retained earnings
Cr Ordinary share capital
Rights issued
Calculation:
Date
Number of shares
Price
Total value
1 October 2014
1 January 2015
Average
4 - 47