Extracts from the draft Statements of Comprehensive Income for the year ended 31 December 20x1, including comparative figures are shown below: 20x1 20x0 RM million RM million Profit before tax 150.5 131.4 Tax expense ( 42.5 ) ( 40.0 ) _________ _________ Profit after 108.0 91.4 ====== ====== On 1 January 20x1, Zumba Bhd had 375 million ordinary shares of 50 sen each in issue. On 1 April 20x1, the company made a rights issue of 1 for every 3 shares held at 60 sen each. Market price was RM 1. On 1 January 20x0, the company issued RM 37.5 million convertible bonds. Each unit of RM 100 bond is convertible into 200 ordinary shares of 50 sen each on 31 December 20x3. The interest expense relating to the liability element of the bonds for the year ended 31 December 20x1 was RM 3.2 million and for the year ended 31 December 20x0 was RM 3 million. The tax related to interest expense was RM 1 million for the year ended 31 December 20x1 and RM 0.9 million for the year ended 31 December 20x0 . Required: Calculate the basic & diluted EPS for the year ended 31 December 20x1 and restated EPS for 20x0.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Extracts from the draft Statements of Comprehensive Income for the year ended 31 December 20x1, including comparative figures are shown below:
20x1 20x0
RM million RM million
Profit before tax 150.5 131.4
Tax expense ( 42.5 ) ( 40.0 )
_________ _________
Profit after 108.0 91.4
====== ======
On 1 January 20x1, Zumba Bhd had 375 million ordinary shares of 50 sen each in issue. On 1 April 20x1, the company made a rights issue of 1 for every 3 shares held at 60 sen each. Market price was RM 1.
On 1 January 20x0, the company issued RM 37.5 million convertible bonds. Each unit of RM 100 bond is convertible into 200 ordinary shares of 50 sen each on 31 December 20x3. The interest expense relating to the liability element of the bonds for the year ended 31 December 20x1 was RM 3.2 million and for the year ended 31 December 20x0 was RM 3 million. The tax related to interest expense was RM 1 million for the year ended 31 December 20x1 and RM 0.9 million for the year ended 31 December 20x0 .
Required:
Calculate the basic & diluted EPS for the year ended 31 December 20x1 and restated EPS for 20x0.
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