FAR570: EARNINGS PER SHARE (MFRS 133)

TUTORIAL 1
QUESTION 1 (Test May 2020_ammended)
Corona_V Berhad (MB), a local manufacturing entity, was established in January 2017. It
made up its first set of accounts to 31 December 2017 and continues to prepare its
accounts to 31 December every year.
The following information relates to the company on 1 January 2018:

1 Jan 2018
RM
5,000,000 ordinary shares of RM2 each 10,000,000
1,000,000 5% cumulative preference shares of RM1 each 1,000,000
500,000 10% preference shares of RM2 each 1,000,000

Additional information:

For the year ended 31 Dec 2018:

i. On 1 April, a rights issue of 1 for every 5 ordinary shares was made at RM4.00
each. The market value of the entity’s ordinary shares immediately before the
right’s offer was RM5.00.
ii. The company only declared and paid half its preference dividend.
iii. The company’s profit after tax was RM4,500,000.
iv. Basic earnings per share for 2017 was 80 sen.

For the year ended 31 Dec 2019:

i. 1 million ordinary shares of RM2 each were issued on 1 October. The shares
were fully subscribed and paid upon its issuance.
ii. The company paid preference dividend in arrears for its 5% cumulative
preference shares. It also declared full dividend payment for the 10% preference
shares but no dividend was declared for the 5% cumulative preference shares.
iii. The company’s profit after tax was RM3,000,000.
iv. Tax rate is 25%.

Required:

a. Calculate the basic earnings per share of Corona_V Berhad for the year ended 31
December 2018, in accordance with the requirements of MFRS 133 Earnings Per
Share restate the EPS for 2017.
(5 marks)
b. Calculate the basic earnings per of Corona_V Berhad for the year ended 31
December 2019, in accordance with the requirements of MFRS 133 Earnings Per
Share.
(3 marks)
(Show all workings)
QUESTION 2 (FAR430/Dec2015)
Given below is an extract from the Statement of Profit or Loss of Maya Bhd, for the year
ended 31 December 2014.
RM
Profit before tax 170,000
Taxation (25%) (42,500)
Profit after tax 127,500

Dividend paid for the year:

Preference dividend 80.000
Ordinary dividend 20,000

EPS for 2013 4 sen

Additional information:
1. lssued share capital as at 1 January 2014:

RM
1,000,000 Ordinary shares of RM1 each 1,000,000
400,000 10% Cumulative Preference shares of RM1 each 400,000

1,400,000

2. On 1 January 2014, the entity has splitted the existing ordinary shares into shares of
RM0.50 each.

3. On 1 May 2014, the entity made a bonus issue of 1 for every 5 shares.

4. On 1 October 2014, the entity bought back 500,000 ordinary shares.

5. As of 31 December 2014, the entity declared and paid the current year’s preference
dividends, the previous year’s preference dividends in arrears and 2% dividends for
the ordinary shares.

Required:
a. Compute the entity’s basic earnings per share (EPS) for the year ended 31
December 2014. Restate previous year’s EPS where necessary. (6 marks)

QUESTION 3 (TEST JUNE2021_ammended)

Given below is the financial information of Ratu Bhd for the year ended 31 May 2020.
Issued and paid-up capital:
5,000,000 ordinary share Capital RM5,000,000
100,000 5%cumulative preference shares RM50,000
 Profit for after tax for the year RM1,500,000

Additional information:
1. On 1 June 2020, the entity issued 2 million ordinary shares of 50 sen each.

2. On 1 December 2020, the entity made a rights issue of 1 ordinary shares for every 5
shares held. The price before and after right issue was RM2.50 and RM1.50
respectively

3. On 1 March 2021, the company bought back 500,000 ordinary shares

4. No tax is deducted from dividend paid or distributed to shareholders The tax rate was
25%.

Required:
a. Calculate the basic earnings per share (EPS) for the year ended 31 May 2021.

QUESTION 4 (Feb 2023)

Targaryen Bhd, one of the well-known listed companies which involves in food and
beverages industry in south peninsular of Malaysia. The following accounts were shown in
its Statements of Financial Position as at 31 December 2019:

Particulars RM
Equity and reserves
Issued ordinary shares at RM2 each 40,000,000
2% non-cumulative preference shares at RM1 each 200,000
Retained earnings 12,000,000

The following are the relevant information related to the accounts for the accounting period
ends 31 December 2020 and 2021.

i. On 1 July 2020, the company made a right issue of 1 share for every 4 shares held at
RM1.50. The fair value of the shares prior to the right issue is RM2.00.

ii. Additional 500,000 ordinary shares were issued on 1 May 2021.

iii. Profit after tax attributable to equity holders for the year ended 31 December 2020
and 2021 were RM1,500,000 and RM2,500,000 respectively.

iv. The company paid preference shares dividend amounted to RM2,000 in year 2020.

v. Tax rate for each year was at 25%.

Required:

a. Calculate the basic earnings per share for the year ended 31 December 2020 and 31
December 2021
QUESTION 5 (TEST June 2022)

Teguh Bhd had in issue 30,000,000 ordinary shares issued at RM1 each and 1,000,000 5%
cumulative preference share issued at RM1 as at 1 January 2021. The net profit attributable
to ordinary shares for the year 2021 was RM4,000,000.

During the year ended 31 December 2021, the following transactions were undertaken by
the company:

1 March 2021 Teguh Bhd make a bonus issue of 1 for every 4 shares to its
existing shareholders.

1 September 2021 Teguh Bhd issued 500,000 ordinary shares at a market price of
RM2.00 per share.

31 December 2021 Teguh Bhd declared and paid RM30,000 of preference dividend.

The income tax rate is 25% and the company’s financial year ends on 31 December each
year.

Required:

a. Compute the Basic EPS for the year end 2021.