Bonus issue – NBC Institute

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

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

Topic: Earnings Per Share (IAS 33)

FA – Nov 2012 – L1 – SA – Q2 – Financial Statements

Identifying a non-characteristic of a bonus issue.

Question

Which of these is NOT a characteristic of bonus issue?

A. Increasing capital without diluting current shareholdings
B. Capitalising reserves, so that they cannot be paid as dividends
C. Not raising cash
D. Generating new shares
E. Could jeopardise payment of future dividend if profit declines

Answer

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Tags: Bonus issue, Capital, Dividends, Shareholders
Level: Level 1

CR – Apr 2022 – L3 – Q2c – Earnings Per Share

Calculate and restate earnings per share (EPS) for the current and previous year, factoring in rights and bonus issues under IAS 33.

Question

On 1 January 2020, Kalimba Ltd had 2 million ordinary shares in issue. On 30 April 2020, the company issued 270,000 ordinary shares at full market price. On 31 July 2020, the company made a rights issue of 1 for 10 at GH¢2. The fair value of the shares on the last day before the rights issue was GH¢3.10. On 30 September 2020, the company made a 1 for 20 bonus issue. Profit for the period was GH¢400,000. The reported earnings per share for the year ended 31 December 2019 was GH¢0.186.

Required:
Calculate the earnings per share (EPS) for the year ended 31 December 2020, and the restated EPS for the year ended 31 December 2019, in accordance with relevant International Financial Reporting Standards (IFRS).

Answer

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Tags: Bonus issue, Earnings Per Share, IAS 33, Restated EPS, Rights Issue, Theoretical ex-rights price, Weighted average shares
Level: Level 3

Topic: IAS 33 - Earnings Per Share
Series: APR 2022

AT – Nov 2015 – L3 – Q4d – Business income – Corporate income tax

Discussing the tax implications of a bonus issue in the retained earnings of a company.

Question

The following is a statement of retained earnings:

Required:
What is the tax implication, if any, on the above income statement?

Answer

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Tags: Bonus issue, Dividend tax, Retained Earnings, Withholding Tax
Level: Level 3

Topic: Business income - Corporate income tax
Series: NOV 2015

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)

FA – Nov 2012 – L1 – SA – Q2 – Financial Statements

Identifying a non-characteristic of a bonus issue.

Question

Which of these is NOT a characteristic of bonus issue?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bonus issue, Capital, Dividends, Shareholders
Level: Level 1

CR – Apr 2022 – L3 – Q2c – Earnings Per Share

Calculate and restate earnings per share (EPS) for the current and previous year, factoring in rights and bonus issues under IAS 33.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bonus issue, Earnings Per Share, IAS 33, Restated EPS, Rights Issue, Theoretical ex-rights price, Weighted average shares
Level: Level 3

Topic: IAS 33 - Earnings Per Share
Series: APR 2022

AT – Nov 2015 – L3 – Q4d – Business income – Corporate income tax

Discussing the tax implications of a bonus issue in the retained earnings of a company.

Question

The following is a statement of retained earnings:

Required:
What is the tax implication, if any, on the above income statement?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Bonus issue, Dividend tax, Retained Earnings, Withholding Tax
Level: Level 3

Topic: Business income - Corporate income tax
Series: NOV 2015

Question Tag: Bonus issue

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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.

FA – Nov 2012 – L1 – SA – Q2 – Financial Statements

Identifying a non-characteristic of a bonus issue.

CR – Apr 2022 – L3 – Q2c – Earnings Per Share

Calculate and restate earnings per share (EPS) for the current and previous year, factoring in rights and bonus issues under IAS 33.

AT – Nov 2015 – L3 – Q4d – Business income – Corporate income tax

Discussing the tax implications of a bonus issue in the retained earnings of a company.

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.

FA – Nov 2012 – L1 – SA – Q2 – Financial Statements

Identifying a non-characteristic of a bonus issue.

CR – Apr 2022 – L3 – Q2c – Earnings Per Share

Calculate and restate earnings per share (EPS) for the current and previous year, factoring in rights and bonus issues under IAS 33.

AT – Nov 2015 – L3 – Q4d – Business income – Corporate income tax

Discussing the tax implications of a bonus issue in the retained earnings of a company.

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Question Tag: Bonus issue

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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.

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FA – Nov 2012 – L1 – SA – Q2 – Financial Statements

Identifying a non-characteristic of a bonus issue.

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CR – Apr 2022 – L3 – Q2c – Earnings Per Share

Calculate and restate earnings per share (EPS) for the current and previous year, factoring in rights and bonus issues under IAS 33.

You're reporting an error for "CR – Apr 2022 – L3 – Q2c – Earnings Per Share"

AT – Nov 2015 – L3 – Q4d – Business income – Corporate income tax

Discussing the tax implications of a bonus issue in the retained earnings of a company.

You're reporting an error for "AT – Nov 2015 – L3 – Q4d – Business income – Corporate income tax"

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)"

FA – Nov 2012 – L1 – SA – Q2 – Financial Statements

Identifying a non-characteristic of a bonus issue.

You're reporting an error for "FA – Nov 2012 – L1 – SA – Q2 – Financial Statements"

CR – Apr 2022 – L3 – Q2c – Earnings Per Share

Calculate and restate earnings per share (EPS) for the current and previous year, factoring in rights and bonus issues under IAS 33.

You're reporting an error for "CR – Apr 2022 – L3 – Q2c – Earnings Per Share"

AT – Nov 2015 – L3 – Q4d – Business income – Corporate income tax

Discussing the tax implications of a bonus issue in the retained earnings of a company.

You're reporting an error for "AT – Nov 2015 – L3 – Q4d – Business income – Corporate income tax"

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