Reference no: EM133088147
Question - Accounting for Equity and Liabilities Question The following information relates to Siwaka Ltd. as at 31st December 2019
Ordinary shares of sh. 10 each- sh 60,000
10% cumulative preference shares of sh. 20 each-sh 40,000
12% Convertible loans notes of sh.10- each 50,000
Profit after tax for the year -171,200
Additional information
1. On 1st February 2019, the company issued 1.5million ordinary shares at full market price.
2. On 30th June 2019, the company made a rights issue of 1 ordinary share for every 4 ordinary shares held on that date. The exercise price was sh.36 per share and the market price on the last quotation was sh.48 per share.
3. The convertible loan notes were issued in the year 2017. Ten convertible loan notes are convertible into one new ordinary share.
4. On 1st October 2019, the employees of the company were granted share options to purchase 1 million ordinary shares at sh. 30 each. The average market share price was sh.48 per share. As at 31st December 2019 none of the employees had exercised their options.
5. The corporate tax rate is 30%.
Required -
a) Determine the basic earnings per share for the year ended 31st December 2019 in conformity with IAS 33 (Earnings per share).
b) Determine the diluted earnings per share (EPS) for the year ended 31st December 2019 in conformity with IAS 33 (Earnings per share).
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