HKAS33

Entity A is a trading company that has been listed in Hong Kong for many years.

The current accounting year of Entity A is 1 April 2020 to 31 March 2021. The accounting manager of Entity A is now preparing the earnings per share ratio for the year ended 31 March 2021.

There are outstanding share options on 2,000,000 shares, which can be exercised at a future date, at an exercise price of $2.50 per share. The average market price of shares in Entity A during the current accounting year was $10.00.

All the share related issues for this year are listed below:

• On 1 April 2020, Entity A had 10,000,000 ordinary shares.
• On 1 May 2020, Entity A issued a 1 for 8 rights issue of $3.00 each. The actual cum-rights price is $12.00.
• On 31 July 2020, Entity A repurchased 850,000 of its own shares at the current market price.
• On 1 October 2020, Entity A issued 800,000, 10% irredeemable convertible preference share of $8,000,000 at one ordinary share for every five irredeemable convertible preference shares.
• On 31 October 2020, Entity A made a 1 for 5 bonus issue.
• On 1 January 2021, Entity A issued 550,000 additional shares at full market price.
• On 1 March 2021, Entity A made a 4 for 1 share split.

The profits before tax for the period of 1 April 2020 to 31 March 2021 was $78,000,000 and the previous EPS for the year ended 31 March 2020 is $3.256 per share. The tax rate is 16.50%.

REQUIRED:

Evaluate the below items in accordance with the HKAS 33 Earnings per share:

(a) The actual number of ordinary shares for the year ended 31 March 2021.

ANSWER:

(b) Weighted average number of ordinary shares for the year ended 31 March 2021.

ANSWER:

(c) Theoretical ex-rights price of the rights issue on 1 May 2020.

ANSWER: $

(d) Basic earnings per share for the year ended 31 March 2021.

ANSWER: $ per share

(e) Basic earnings per share for the year ended 31 March 2020 as reported on 31 March 2021.

ANSWER: $ per share

(f) Diluted earnings per share for the year ended 31 March 2021.

ANSWER: $ per share