Basic EPS – NBC Institute

CR – Nov 2016 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculation of Soar Plc’s basic and fully diluted earnings per share considering new shares, convertible loans, and associated financing costs.

Question

The directors of Soar Plc have decided to replace most of the existing plant and machinery, which are now obsolete, during the year ended September 30, 2015, to enhance earnings. The costs of removing existing plant and acquiring and installing new plant have been estimated at N750,000.

To improve liquidity, the directors issued 800,000 ordinary shares at N2 per share fully paid on January 1, 2015, and N600,000 4% convertible loan notes on June 1, 2015. The conversion terms are as follows:

Date	Number of shares per N100 of loan stock
2015	120
2016	125
2017	118
2018	122

The new ordinary shares rank for dividends in the current year. Relevant data for the year ended September 30, 2015:

Profit before interest and tax: N850,000
Effective company tax rate: 30%
Basic EPS for 2014: 48 kobo
Issued shares as of September 30, 2014:
- 2,000,000 ordinary shares of 50 kobo each
- 400,000 12% irredeemable preference shares of N1 each
- 300,000 10% redeemable preference shares of N1 each
- N700,000 8% redeemable debenture (non-convertible)

Required: Calculate for Soar Plc for the year ended September 30, 2015: i. Basic earnings per share (5 marks)
ii. Fully diluted earnings per share (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Convertible Loan, EPS Calculation, Fully Diluted EPS, IAS 33, Share Issuance
Level: Level 3

Topic: Earnings Per Share (IAS 33)

CR – Nov 2021 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculate basic and diluted earnings per share (EPS) from Nsukka Plc’s consolidated financial statements.

Question

b. The following financial information relates to Nsukka Group for the year ended June 30, 2021.

Nsukka Group Consolidated Statement of Financial Position as at June 30, 2021

Additional Information:

Nsukka PLC reports a profit after tax, after adjusting for all current year accounting issues, of N1,850,000 and an effective tax rate of 20%.
For the first time, Nsukka PLC issued 1,000,000 ordinary shares and granted options for 400,000 shares on July 1, 2020. The exercise price was the market price of N1.50 per share at the grant date. Options vest on July 1, 2020, and expire on June 30, 2022. The average market price of shares in Nsukka Plc during the year ended June 30, 2022, was N1.834.
A rights issue of 1 for every 20 shares was made on May 31, 2021, at a price of N1.30 per share. The market price at this date was N1.60, and the average price for the year to June 30, 2021, was N1.65.
Nsukka PLC has N1,000,000 of 6% convertible loans included in other non-current liabilities. These were in issue throughout the year and may be converted into 100,000 ordinary shares. No loans were converted during the year. There are no dividends in arrears on the 3% preference shares.

Required:

Evaluate basic and diluted earnings per share from the consolidated statement of financial position as at June 30, 2021, for Nsukka Plc.
(12 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Convertible Loans, Diluted EPS, Financial Ratios, Share Options
Level: Level 3

Topic: Earnings Per Share (IAS 33)

CR – Nov 2020 – L3 – Q2 – Earnings Per Share (IAS 33)

Calculate EPS under various scenarios for Goodwin plc and explain EPS use in investment decisions, including examples of potential ordinary shares.

Question

Goodwin plc
Statement of profit or loss extract for the year ended December 31, 2019

As at January 1, 2019, the issued share capital of Goodwin plc was as follows:

23,000 6% preference shares of N1 each
20,700 ordinary shares of N1 each

Required: Calculate the basic and diluted earnings per share for the year ended December 31, 2019 under the following circumstances:

a. Where there is no change in the issued share capital. (5 Marks)

b. The company made a bonus issue of one ordinary share for every four shares in issue at September 30, 2019. (3 Marks)

c. The company made a rights issue of shares on October 1, 2019 in the proportion of 1 for every 5 shares held at a price of N1.20. The middle market price for the shares on the last day of quotation cum rights was N1.80 per share. (8 Marks)

d. Briefly discuss how investors use the EPS ratio in investment decisions and give TWO examples of potential ordinary shares under IAS 33. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Bonus issue, Diluted EPS, EPS, IAS 33, Investment decisions, Rights Issue
Level: Level 3

Topic: Earnings Per Share (IAS 33)

FR – Nov 2022 – L2 – Q6a – Potential Ordinary Shares in EPS Calculation

Explain potential ordinary shares with three examples as per IAS 33.

Question

IAS 33 – Earnings Per Share (EPS) requires entities to calculate basic and diluted earnings per share. However, diluted EPS and basic EPS will usually differ when there are potential ordinary shares in existence.
Required:

i. Explain the term “potential ordinary share” and provide THREE examples as stated in IAS 33. (3 Marks)
ii. Describe the procedure for ranking when there are several types of potential ordinary share in issue when calculating diluted EPS.
(3 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Convertible Bonds, Diluted EPS, Potential Ordinary Shares, Share Options
Level: Level 2

Topic: Earnings Per Share (IAS 33)
Series: NOV 2022

FR – May 2021 – L2 – Q2c – Basic and Diluted Earnings Per Share under IAS 33

Calculate basic and diluted earnings per share based on the financial information provided.

Question

Dome Ltd has 5,000,000 ordinary shares in issue and also had in issue in 2020:

GH¢1,000,000 of 14% convertible loan stock, convertible in three years at the rate of 2 shares for every GH¢10 of stock.
GH¢2,000,000 of 10% convertible loan stock, convertible in a year’s time at the rate of 3 shares for every GH¢5 of stock.

The total earnings in 2020 were GH¢1,750,000. The rate of income tax is 35%.

Required:
In accordance with IAS 33: Earnings Per Share, calculate the basic and diluted earnings per share.
(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Convertible Loan Stock, Diluted EPS, IAS 33, Taxation
Level: Level 2

Topic: IAS 33 - Earnings Per Share
Series: MAY 2021

CR – Nov 2023 – L3 – Q2a – IAS 33: Earnings Per Share

Calculation of basic and diluted earnings per share for Tofiakwa Plc, and advice on depreciation and decommissioning cost for Odehyieba Plc.

Question

a) The following information was extracted from the financial statements of Tofiakwa Plc for the financial year-end 30 June 2023 to determine the year’s basic earnings per share and diluted earnings per share:

Item	Amount (GH¢)
Profit after tax from continuing operations	1,925,000
Non-controlling interests’ profit	200,000
Ordinary shares, 150,000 issued at GH¢2	300,000
(This figure includes an additional 50,000 ordinary shares issued on 1/10/2022 for cash)
5% non-cumulative preference shares, 500,000 issued at GH¢1	500,000
Average market price for one ordinary share during the year	15

Additional Information:

Tofiakwa Plc entered into a market transaction on 1 December 2022 to repurchase 12,000 ordinary shares at fair value.
20% convertible debentures: 4,000 debentures with an issue value of GH¢1,000 per debenture. Each debenture is convertible into ten ordinary shares. Holders of 3,800 convertible debentures converted their holdings into ordinary shares on 1 May 2023.
The tax rate is 30%.

Required:
For Tofiakwa Plc for the year ending 30 June 2023, calculate:
i) The basic earnings per share. (5 marks)
ii) The diluted earnings per share. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Convertible Debentures, Decommissioning Cost, Depreciation, Diluted EPS, Revaluation Surplus
Level: Level 3

Topic: IAS 33 - Earnings Per Share
Series: NOV 2023

CR – Nov 2016 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculation of Soar Plc’s basic and fully diluted earnings per share considering new shares, convertible loans, and associated financing costs.

Question

Date	Number of shares per N100 of loan stock
2015	120
2016	125
2017	118
2018	122

The new ordinary shares rank for dividends in the current year. Relevant data for the year ended September 30, 2015:

Profit before interest and tax: N850,000
Effective company tax rate: 30%
Basic EPS for 2014: 48 kobo
Issued shares as of September 30, 2014:
- 2,000,000 ordinary shares of 50 kobo each
- 400,000 12% irredeemable preference shares of N1 each
- 300,000 10% redeemable preference shares of N1 each
- N700,000 8% redeemable debenture (non-convertible)

Required: Calculate for Soar Plc for the year ended September 30, 2015: i. Basic earnings per share (5 marks)
ii. Fully diluted earnings per share (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Convertible Loan, EPS Calculation, Fully Diluted EPS, IAS 33, Share Issuance
Level: Level 3

Topic: Earnings Per Share (IAS 33)

CR – Nov 2021 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculate basic and diluted earnings per share (EPS) from Nsukka Plc’s consolidated financial statements.

Question

b. The following financial information relates to Nsukka Group for the year ended June 30, 2021.

Nsukka Group Consolidated Statement of Financial Position as at June 30, 2021

Additional Information:

Nsukka PLC reports a profit after tax, after adjusting for all current year accounting issues, of N1,850,000 and an effective tax rate of 20%.
For the first time, Nsukka PLC issued 1,000,000 ordinary shares and granted options for 400,000 shares on July 1, 2020. The exercise price was the market price of N1.50 per share at the grant date. Options vest on July 1, 2020, and expire on June 30, 2022. The average market price of shares in Nsukka Plc during the year ended June 30, 2022, was N1.834.
A rights issue of 1 for every 20 shares was made on May 31, 2021, at a price of N1.30 per share. The market price at this date was N1.60, and the average price for the year to June 30, 2021, was N1.65.
Nsukka PLC has N1,000,000 of 6% convertible loans included in other non-current liabilities. These were in issue throughout the year and may be converted into 100,000 ordinary shares. No loans were converted during the year. There are no dividends in arrears on the 3% preference shares.

Required:

Evaluate basic and diluted earnings per share from the consolidated statement of financial position as at June 30, 2021, for Nsukka Plc.
(12 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Convertible Loans, Diluted EPS, Financial Ratios, Share Options
Level: Level 3

Topic: Earnings Per Share (IAS 33)

CR – Nov 2020 – L3 – Q2 – Earnings Per Share (IAS 33)

Calculate EPS under various scenarios for Goodwin plc and explain EPS use in investment decisions, including examples of potential ordinary shares.

Question

Goodwin plc
Statement of profit or loss extract for the year ended December 31, 2019

As at January 1, 2019, the issued share capital of Goodwin plc was as follows:

23,000 6% preference shares of N1 each
20,700 ordinary shares of N1 each

Required: Calculate the basic and diluted earnings per share for the year ended December 31, 2019 under the following circumstances:

a. Where there is no change in the issued share capital. (5 Marks)

b. The company made a bonus issue of one ordinary share for every four shares in issue at September 30, 2019. (3 Marks)

d. Briefly discuss how investors use the EPS ratio in investment decisions and give TWO examples of potential ordinary shares under IAS 33. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Bonus issue, Diluted EPS, EPS, IAS 33, Investment decisions, Rights Issue
Level: Level 3

Topic: Earnings Per Share (IAS 33)

FR – Nov 2022 – L2 – Q6a – Potential Ordinary Shares in EPS Calculation

Explain potential ordinary shares with three examples as per IAS 33.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Convertible Bonds, Diluted EPS, Potential Ordinary Shares, Share Options
Level: Level 2

Topic: Earnings Per Share (IAS 33)
Series: NOV 2022

FR – May 2021 – L2 – Q2c – Basic and Diluted Earnings Per Share under IAS 33

Calculate basic and diluted earnings per share based on the financial information provided.

Question

Dome Ltd has 5,000,000 ordinary shares in issue and also had in issue in 2020:

GH¢1,000,000 of 14% convertible loan stock, convertible in three years at the rate of 2 shares for every GH¢10 of stock.
GH¢2,000,000 of 10% convertible loan stock, convertible in a year’s time at the rate of 3 shares for every GH¢5 of stock.

The total earnings in 2020 were GH¢1,750,000. The rate of income tax is 35%.

Required:
In accordance with IAS 33: Earnings Per Share, calculate the basic and diluted earnings per share.
(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Convertible Loan Stock, Diluted EPS, IAS 33, Taxation
Level: Level 2

Topic: IAS 33 - Earnings Per Share
Series: MAY 2021

CR – Nov 2023 – L3 – Q2a – IAS 33: Earnings Per Share

Calculation of basic and diluted earnings per share for Tofiakwa Plc, and advice on depreciation and decommissioning cost for Odehyieba Plc.

Question

Item	Amount (GH¢)
Profit after tax from continuing operations	1,925,000
Non-controlling interests’ profit	200,000
Ordinary shares, 150,000 issued at GH¢2	300,000
(This figure includes an additional 50,000 ordinary shares issued on 1/10/2022 for cash)
5% non-cumulative preference shares, 500,000 issued at GH¢1	500,000
Average market price for one ordinary share during the year	15

Additional Information:

Tofiakwa Plc entered into a market transaction on 1 December 2022 to repurchase 12,000 ordinary shares at fair value.
20% convertible debentures: 4,000 debentures with an issue value of GH¢1,000 per debenture. Each debenture is convertible into ten ordinary shares. Holders of 3,800 convertible debentures converted their holdings into ordinary shares on 1 May 2023.
The tax rate is 30%.

Required:
For Tofiakwa Plc for the year ending 30 June 2023, calculate:
i) The basic earnings per share. (5 marks)
ii) The diluted earnings per share. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basic EPS, Convertible Debentures, Decommissioning Cost, Depreciation, Diluted EPS, Revaluation Surplus
Level: Level 3

Topic: IAS 33 - Earnings Per Share
Series: NOV 2023

Question Tag: Basic EPS

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

CR – Nov 2016 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculation of Soar Plc’s basic and fully diluted earnings per share considering new shares, convertible loans, and associated financing costs.

CR – Nov 2021 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculate basic and diluted earnings per share (EPS) from Nsukka Plc’s consolidated financial statements.

CR – Nov 2020 – L3 – Q2 – Earnings Per Share (IAS 33)

Calculate EPS under various scenarios for Goodwin plc and explain EPS use in investment decisions, including examples of potential ordinary shares.

FR – Nov 2022 – L2 – Q6a – Potential Ordinary Shares in EPS Calculation

Explain potential ordinary shares with three examples as per IAS 33.

FR – May 2021 – L2 – Q2c – Basic and Diluted Earnings Per Share under IAS 33

Calculate basic and diluted earnings per share based on the financial information provided.

CR – Nov 2023 – L3 – Q2a – IAS 33: Earnings Per Share

Calculation of basic and diluted earnings per share for Tofiakwa Plc, and advice on depreciation and decommissioning cost for Odehyieba Plc.

CR – Nov 2016 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculation of Soar Plc’s basic and fully diluted earnings per share considering new shares, convertible loans, and associated financing costs.

CR – Nov 2021 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculate basic and diluted earnings per share (EPS) from Nsukka Plc’s consolidated financial statements.

CR – Nov 2020 – L3 – Q2 – Earnings Per Share (IAS 33)

Calculate EPS under various scenarios for Goodwin plc and explain EPS use in investment decisions, including examples of potential ordinary shares.

FR – Nov 2022 – L2 – Q6a – Potential Ordinary Shares in EPS Calculation

Explain potential ordinary shares with three examples as per IAS 33.

FR – May 2021 – L2 – Q2c – Basic and Diluted Earnings Per Share under IAS 33

Calculate basic and diluted earnings per share based on the financial information provided.

CR – Nov 2023 – L3 – Q2a – IAS 33: Earnings Per Share

Calculation of basic and diluted earnings per share for Tofiakwa Plc, and advice on depreciation and decommissioning cost for Odehyieba Plc.

Our offerings

Contact Info

Customer

Get In Touch

Question Tag: Basic EPS

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

CR – Nov 2016 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculation of Soar Plc’s basic and fully diluted earnings per share considering new shares, convertible loans, and associated financing costs.

You're reporting an error for "CR – Nov 2016 – L3 – Q2b – Earnings Per Share (IAS 33)"

CR – Nov 2021 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculate basic and diluted earnings per share (EPS) from Nsukka Plc’s consolidated financial statements.

You're reporting an error for "CR – Nov 2021 – L3 – Q2b – Earnings Per Share (IAS 33)"

CR – Nov 2020 – L3 – Q2 – Earnings Per Share (IAS 33)

Calculate EPS under various scenarios for Goodwin plc and explain EPS use in investment decisions, including examples of potential ordinary shares.

You're reporting an error for "CR – Nov 2020 – L3 – Q2 – Earnings Per Share (IAS 33)"

FR – Nov 2022 – L2 – Q6a – Potential Ordinary Shares in EPS Calculation

Explain potential ordinary shares with three examples as per IAS 33.

You're reporting an error for "FR – Nov 2022 – L2 – Q6a – Potential Ordinary Shares in EPS Calculation"

FR – May 2021 – L2 – Q2c – Basic and Diluted Earnings Per Share under IAS 33

Calculate basic and diluted earnings per share based on the financial information provided.

You're reporting an error for "FR – May 2021 – L2 – Q2c – Basic and Diluted Earnings Per Share under IAS 33"

CR – Nov 2023 – L3 – Q2a – IAS 33: Earnings Per Share

Calculation of basic and diluted earnings per share for Tofiakwa Plc, and advice on depreciation and decommissioning cost for Odehyieba Plc.

You're reporting an error for "CR – Nov 2023 – L3 – Q2a – IAS 33: Earnings Per Share"

CR – Nov 2016 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculation of Soar Plc’s basic and fully diluted earnings per share considering new shares, convertible loans, and associated financing costs.

You're reporting an error for "CR – Nov 2016 – L3 – Q2b – Earnings Per Share (IAS 33)"

CR – Nov 2021 – L3 – Q2b – Earnings Per Share (IAS 33)

Calculate basic and diluted earnings per share (EPS) from Nsukka Plc’s consolidated financial statements.

You're reporting an error for "CR – Nov 2021 – L3 – Q2b – Earnings Per Share (IAS 33)"

CR – Nov 2020 – L3 – Q2 – Earnings Per Share (IAS 33)

Calculate EPS under various scenarios for Goodwin plc and explain EPS use in investment decisions, including examples of potential ordinary shares.

You're reporting an error for "CR – Nov 2020 – L3 – Q2 – Earnings Per Share (IAS 33)"

FR – Nov 2022 – L2 – Q6a – Potential Ordinary Shares in EPS Calculation

Explain potential ordinary shares with three examples as per IAS 33.

You're reporting an error for "FR – Nov 2022 – L2 – Q6a – Potential Ordinary Shares in EPS Calculation"

FR – May 2021 – L2 – Q2c – Basic and Diluted Earnings Per Share under IAS 33

Calculate basic and diluted earnings per share based on the financial information provided.

You're reporting an error for "FR – May 2021 – L2 – Q2c – Basic and Diluted Earnings Per Share under IAS 33"

CR – Nov 2023 – L3 – Q2a – IAS 33: Earnings Per Share

Calculation of basic and diluted earnings per share for Tofiakwa Plc, and advice on depreciation and decommissioning cost for Odehyieba Plc.

You're reporting an error for "CR – Nov 2023 – L3 – Q2a – IAS 33: Earnings Per Share"

Our offerings

Contact Info

Customer

Get In Touch

admin