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(a) Calculate the basic earnings per share for the year ended 30 June 2020. (b) Calculate the diluted earnings per share for the year ended 30 June 2020. Note: ignore the unpaid balance of the partly paid shares.

(a) Calculate the basic earnings per share for the year ended 30 June 2020. (b) Calculate the diluted earnings per share for the year ended 30 June 2020. Note: ignore the unpaid balance of the partly paid shares.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 2 For the year ended 30 June 2020, Murray Ltd had a net profit after tax of $3,300,000. Details of the shares and other financial instruments outstanding are as follows: On 1 July 2019 Murray Ltd had 600,000 fully paid ordinary shares. • 300,000 fully paid ordinary shares were issued on 1 November 2019 at the prevailing market price. • 75,000 fully paid ordinary shares were bought back on 1 May 2020 at the prevailing market price. • 210,000 partly paid ordinary shares were issued on 1 May 2020 at a price of $6.00. The shares were partly paid to $4.50 and carried the right to participate in dividends in proportion to the amount paid as a fraction of the issue price. • For the entire year, 3 million $3.00 preference shares were held which provided a dividend at a rate of 5% per annum. • The preference shares are convertible at a rate of 1 ordinary share for every 4 preference shares. There are options to purchase 60,000 ordinary shares at a price of $15. For the year ended 30 June 2020, the ordinary shares traded at an average market price of $18 per share. Additional Information: there are 28 days in February; 30 days in September, November, April, and June; 31 days in October, December, January, March, May, July, and August. Required: In accordance with AASB 133 Earnings Per Share: (a) Calculate the basic earnings per share for the year ended 30 June 2020. (b) Calculate the diluted earnings per share for the year ended 30 June 2020. Note: ignore the unpaid balance of the partly paid shares.
Transcribed Image Text:Question 2 For the year ended 30 June 2020, Murray Ltd had a net profit after tax of $3,300,000. Details of the shares and other financial instruments outstanding are as follows: On 1 July 2019 Murray Ltd had 600,000 fully paid ordinary shares. • 300,000 fully paid ordinary shares were issued on 1 November 2019 at the prevailing market price. • 75,000 fully paid ordinary shares were bought back on 1 May 2020 at the prevailing market price. • 210,000 partly paid ordinary shares were issued on 1 May 2020 at a price of $6.00. The shares were partly paid to $4.50 and carried the right to participate in dividends in proportion to the amount paid as a fraction of the issue price. • For the entire year, 3 million $3.00 preference shares were held which provided a dividend at a rate of 5% per annum. • The preference shares are convertible at a rate of 1 ordinary share for every 4 preference shares. There are options to purchase 60,000 ordinary shares at a price of $15. For the year ended 30 June 2020, the ordinary shares traded at an average market price of $18 per share. Additional Information: there are 28 days in February; 30 days in September, November, April, and June; 31 days in October, December, January, March, May, July, and August. Required: In accordance with AASB 133 Earnings Per Share: (a) Calculate the basic earnings per share for the year ended 30 June 2020. (b) Calculate the diluted earnings per share for the year ended 30 June 2020. Note: ignore the unpaid balance of the partly paid shares.
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